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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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    Cited by:

    1. van Rooyen, C. & Stewart, R. & de Wet, T., 2012. "The Impact of Microfinance in Sub-Saharan Africa: A Systematic Review of the Evidence," World Development, Elsevier, vol. 40(11), pages 2249-2262.
    2. Shirazi, Nasim Shah, 2012. "Targeting and Socio-Economic Impact of Microfinance: A Case Study of Pakistan," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 1-28.
    3. Thorp, Rosemary & Stewart, Frances & Heyer, Amrik, 2005. "When and how far is group formation a route out of chronic poverty?," World Development, Elsevier, vol. 33(6), pages 907-920, June.
    4. B. Mak Arvin & Byron Lew (ed.), 2015. "Handbook on the Economics of Foreign Aid," Books, Edward Elgar Publishing, number 15762.
    5. Isabelle Agier & Ariane Szafarz, 2011. "Credit to Women Entrepreneurs: The Curse of the Trustworthier Sex," Working Papers CEB 11-005, ULB -- Universite Libre de Bruxelles.
    6. Chliova, Myrto & Brinckmann, Jan & Rosenbusch, Nina, 2015. "Is microcredit a blessing for the poor? A meta-analysis examining development outcomes and contextual considerations," Journal of Business Venturing, Elsevier, vol. 30(3), pages 467-487.
    7. Paul Mosley & June Rock, 2004. "Microfinance, labour markets and poverty in Africa: a study of six institutions," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 467-500.
    8. Mukhopadhyay, Jyoti Prasad, 2014. "Does access to microfinance affect consumption inequality? :evidence from a randomized controlled trial in Andhra Pradesh, India," MPRA Paper 58674, University Library of Munich, Germany.
    9. Sefa K. Awaworyi, 2014. "The Impact of Microfinance Interventions: A Meta-analysis," Monash Economics Working Papers 03-14, Monash University, Department of Economics.
    10. Soliman, Ibrahim & Mashhour, Ahmed, 2012. "National agro-food policies in Jordan," MPRA Paper 66782, University Library of Munich, Germany, revised 10 May 2012.
    11. Asad K. Ghalib, 2011. "Estimating the depth of microfinance programme outreach: empirical findings from rural Pakistan," Brooks World Poverty Institute Working Paper Series 15411, BWPI, The University of Manchester.
    12. Mitlin, Diana & Hickey, Sam & Bebbington, Anthony, 2007. "Reclaiming Development? NGOs and the Challenge of Alternatives," World Development, Elsevier, vol. 35(10), pages 1699-1720, October.
    13. Andrea F. Presbitero & Roberta Rabellotti, 2014. "Geographical Distance And Moral Hazard In Microcredit: Evidence From Colombia," Journal of International Development, John Wiley & Sons, Ltd., vol. 26(1), pages 91-108, January.
    14. Heiko Fritz & Guenter Lang, 2012. "Microcredit, Human Capital, and Personal Income Distribution: Empirical Evidence from Greater Cairo," Working Papers 30, The German University in Cairo, Faculty of Management Technology.
    15. Dan Brockington & Nicola Banks, 2014. "Exploring the Success of BRAC Tanzania’s Microcredit Programme," Brooks World Poverty Institute Working Paper Series 20214, BWPI, The University of Manchester.

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