In a recently published article by CGAP (Consultative Group to Assist the Poor) entitled, ‘Does Microcredit Really Help Poor People,’ Mr Richard Rosenberg examines the scrutiny surrounding the effectiveness of microcredit in alleviating poverty. He argues that because “studies published so far have not supported the proposition that microcredit raises household incomes or improves welfare,” attention has been drawn away from the benefits of microcredit. He claims that “whether or not microcredit and other financial services help people escape from poverty, there is strong evidence poor people value them very highly because these services help them cope with poverty,” as demonstrated by the high demand for microfinance products and the willingness of poor borrowers to repay uncollateralized loans.

By: Stefanie Rubin, Research Assistant

About CGAP (Consultative Group to Assist the Poor):

Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center dedicated to providing financial access for the world’s poor. CGAP is supported by over thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.

Additional Resources

Source Article: CGAP: Does Microcredit Really Help Poor People?: http://www2.cgap.org/p/site/c/template.rc/1.26.12511/