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Should Access to Credit be a Right?

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  • Marek Hudon

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Abstract

Discussion on financial ethics increasingly includes the problem of exclusion of the poorer segments of society from the financial system and access to credit. This paper explores the ethical dimensions surrounding the concept of a human right to credit. If access to credit is directly instrumental to economic development, poverty reduction and the improved welfare of all citizens, then one can proclaim, as Nobel Prize Laureate M. Yunus has done, that it is a moral necessity to establish credit as a right. Arguments both supporting and opposing the concept of a right to credit are presented. While there may be general agreement that access to financial services may provide a pathway out of poverty, granting a universal right could induce perverse effects such as overindebtedness. Bearing in mind the ultimate goal of proponents of this right as well as the potential harmful consequences, this paper offers a new perspective on the question of access to credit based on a goal-right system.
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Suggested Citation

  • Marek Hudon, 2009. "Should Access to Credit be a Right?," Journal of Business Ethics, Springer, vol. 84(1), pages 17-28, January.
  • Handle: RePEc:kap:jbuset:v:84:y:2009:i:1:p:17-28
    DOI: 10.1007/s10551-008-9670-y
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    File URL: http://hdl.handle.net/10.1007/s10551-008-9670-y
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    References listed on IDEAS

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    1. P. B. Anand, 2007. "Right to water and access to water: an assessment," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(4), pages 511-526.
    2. Marek Hudon, 2007. "Fair interest rates when lending to the poor," ULB Institutional Repository 2013/14204, ULB -- Universite Libre de Bruxelles.
    3. Marc Labie & Anaïs Périlleux, 2008. "Corporate governance in microfinance: credit unions," Working Papers CEB 08-003.RS, ULB -- Universite Libre de Bruxelles.
    4. Pretes, Michael, 2002. "Microequity and Microfinance," World Development, Elsevier, vol. 30(8), pages 1341-1353, August.
    5. Rahman, Aminur, 1999. "Micro-credit initiatives for equitable and sustainable development: Who pays?," World Development, Elsevier, vol. 27(1), pages 67-82, January.
    6. Gauri, Varun, 2004. "Social Rights and Economics: Claims to Health Care and Education in Developing Countries," World Development, Elsevier, vol. 32(3), pages 465-477, March.
    7. Anand, P B, 2007. "Right to water and access to water," MPRA Paper 47437, University Library of Munich, Germany.
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    More about this item

    Keywords

    credit; financial exclusion; human right; justice; microfinance; B0; O16; Q14;

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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