MICROCAPITAL BRIEF: New Book “Why Doesn’t Microfinance Work?” by Milford Bateman Challenges Effectiveness of Microfinance

Milford Bateman challenges many of the common assumptions regarding microfinance in his book “Why Doesn’t Microfinance Work?” published June 10, 2010 by Zed Books. The book primarily argues that microfinance is not only an ineffective tool against poverty, but that it encourages it by trapping entrepreneurs in low-value-added enterprises [1].

Mr Bateman’s experience includes local economic development work in the Balkans and nearly two decades as an academic lecturer and a consultant to local governments and international non-governmental organizations (NGOs).

Reactions in the microfinance community have ranged from support [2], and skepticism [3] to outright denial of his claims [4]. All three groups seem to agree that Mr Bateman’s arguments deserved consideration, though each raised concerns about his case against microfinance.

By Matthew Castner, Research Assistant

Additional Resources

[1] “Why Doesn’t Microfinance Work? The Destructive Rise of Local Neoliberalism,” by Milford Bateman. Scribd, 2010: http://www.scribd.com/doc/33545682/Why-Doesn-t-Microfinance-Work-The-Destructive-Rise-of-Local-Neoliberalism

[2] “Bordercrossing books: ‘Why Doesn’t Microfinance Work? The destructive rise of local neoliberalism,” by Philip Mader, July 22, 2010. Governance Across Borders: http://governancexborders.wordpress.com/2010/07/22/bordercrossing-books-why-doesnt-microfinance-work-the-destructive-rise-of-local-neoliberalism/

[3] “Book Review: ‘Why microfinance doesn’t work’,” by Malcolm Harper, June 7, 2010. Microfinance focus: http://www.microfinancefocus.com/news/2010/06/07/book-review-why-microfinance-doesn%E2%80%99t-work%E2%80%9D/

[4] “New book launched: ‘Why doesn’t microfinance work’,” June 15, 2010. RESULTS UK – The Power to End Poverty: http://resultsuk.wordpress.com/2010/07/15/new-book-launched-why-microfinance-doesnt-work/

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