We’ve all heard about microfinance, the practice of giving small loans to the poor to boost their small businesses. Muhammed Yunus, widely considered the godfather of microfinance, won the Nobel Peace Prize a few years ago. But since then, microfinance has attracted ever-louder critics who see the institution as more exploitive, trapping the impoverished in cycles of debt, than empowering. Humanosphere has tracked the controversy closely.
On this week’s podcast, Tom Paulson speaks with Rick Beckett, who tries to set the record straight. Beckett is the head of Global Partnerships, which has been involved in microfinance across Latin America for more than a decade. Can microfinance lift millions out of poverty, as some of its boosters claimed? Is it a scheme to extract wealth from poor people? How can the private sector be accountable, and how should it work in tandem with governments and charities? From his nuanced responses, it’s clear that Beckett has thought long and hard about these issues, and has even learned from a few mistakes