In this arresting exposé of the microfinance industry, economist and consultant Sinclair argues that while the idea of ending world poverty via small, low-cost loans to the poor (to allow them to start profitable businesses) is a noble one, it has been derailed by greed and “hijacked by profiteers.” Intending to spur investors and regulators to action, Sinclair shows that within this $70 billion industry, many microfinance programs are nothing more than predatory lending schemes rebranded as socially responsible investment opportunities. Sinclair covers the history of the microfinance industry from its founding by Nobel Prize winner Muhammad Yunus through the present day. Microfinance, Sinclair argues, fails its founding premise: interest rates are (by Western standards) usurious and loans are used to maintain life rather than encourage a leg up out of poverty—loans are almost invariably spent on household items, repaying loans, paying other bills, or generally consumed. As Sinclair explains, “The benefits of the loan quickly disappear, but the debt remains.” Meanwhile, Sinclair’s stories from his days working in the microfinance industry are told with almost cinematic flair. (July)
Reviewed on: 05/14/2012 Release date: 07/01/2012 Genre: Nonfiction
During the Covid-19 crisis, Publishers Weekly is providing free digital access to our magazine, archive, and website. To receive the access to the latest issue delivered to your inbox free each week, enter your email below.