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Microfinance: are its promises ethically justified?


  • Annabel Vanroose


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 effectiveness on actual poverty reduction is not yet clear and therefore 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 financial as well as 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

  • Annabel Vanroose, 2007. "Microfinance: are its promises ethically justified?," Working Papers CEB 07-014.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:07-014

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    References listed on IDEAS

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    More about this item


    Ethics; microfinance; commercialization; poverty.;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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