Microfinancing the Developing World: how small loans empower local economies and catalyse neoliberalism's endgame

Abstract

Co-finance has steadily grown to provide credit to hundreds of thousands of individuals living in third world countries. The spreading of and innovation within the microfinance sector demonstrates a successful neoliberal initiative that is both socially conscious and economically beneficial. By connecting groups of poor individuals to lending institutions or affluent individuals in developed countries, microloans have been able to foster the strengthening of local economies, necessary for consuming life-improving technology, while incurring minimal risk to the lending party. Criticisms of microfinance—both non-profit and for-profit models—appear misguided as there are clear data demonstrating both a low incidence of default and modest interest rates. Moreover, credit has been the foundation for modern economic growth. Ethical lending to the Third World should therefore not be denied, but rather intensified through the faculty of microfinance.