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Inequality and the polarizing impact of microcredit: evidence from Zambia's copperbelt

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  • James Copestake

    (University of Bath, UK)

Abstract

While much research has addressed the impact of microcredit on poverty, less attention has been paid to inequality. This paper draws on research on the Zambian Copperbelt to show how impact on income distribution depends upon who obtains loans, who graduates to larger loans, who exits and group dynamics. Some initial levelling up of business income was found, but the more marked overall effect among borrowers was of income polarisation. To gain a full picture, more research is needed into the wider impact of the big gainers not only on their competitors, customers and employees, but also on political tolerance of inequality. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • James Copestake, 2002. "Inequality and the polarizing impact of microcredit: evidence from Zambia's copperbelt," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(6), pages 743-755.
    • Handle: RePEc:wly:jintdv:v:14:y:2002:i:6:p:743-755
    DOI: 10.1002/jid.921
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    References listed on IDEAS

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    1. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
    2. Kevane, Michael & Wydick, Bruce, 2001. "Microenterprise Lending to Female Entrepreneurs: Sacrificing Economic Growth for Poverty Alleviation?," World Development, Elsevier, vol. 29(7), pages 1225-1236, July.
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