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Is microfinance an ethical way to provide financial services to the poor?

Author

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  • VANROOSE , Annabel

    (Vrije Universiteit Brussels and Solvay Business School)

Abstract

Microfinance is increasingly seen as a major development tool. Its promise to help the poor by providing financial services is seen as the major reason for its support. Nevertheless, its ability to effectively reduce poverty is not yet clear, and it generates some unresolved ethical questions. These become even more prominent in the process of commercialization. The impact on poverty is usually measured in financial terms. In this paper, poverty is defined in a broader sense to include deficiency in human and social capital. The article shows that, in this broad sense, microfinance may have negative as well as positive effects on poverty.

Suggested Citation

  • VANROOSE , Annabel, 2007. "Is microfinance an ethical way to provide financial services to the poor?," Ethics and Economics, CREUM, Université de Montréal, vol. 5(1), pages 1-8.
    • Handle: RePEc:ris:etheco:0027
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    Cited by:

    1. Ahmad Nawaz & Sana Iqbal & Sadaf Ehsan, 2018. "Does Social Performance Drive Corporate Governance Mechanism In Case of Asian MFIs? An Issue of Endogeneity," Global Business Review, International Management Institute, vol. 19(4), pages 988-1012, August.
    2. Uddin, Md Hamid & Akter, Shabiha & Mollah, Sabur & Al Mahi, Masnun, 2022. "Differences in bank and microfinance business models: An analysis of the loan monitoring systems and funding sources," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    3. Nawaz, Ahmad & Iqbal, Sana, 2015. "Does Social Performance Drives Corporate Governance Mechanism in MFIs? An Issue of Endogeneity," MPRA Paper 65312, University Library of Munich, Germany.

    More about this item

    Keywords

    Ethics; microfinance; commercialization; poverty;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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