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Should access to credit be a right?

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  • Marek Hudon

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?," ULB Institutional Repository 2013/14210, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:ulb:ulbeco:2013/14210
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    References listed on IDEAS

    as
    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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    Cited by:

    1. Davide Forcella & Marek Hudon, 2016. "Green Microfinance in Europe," Journal of Business Ethics, Springer, vol. 135(3), pages 445-459, May.
    2. Agier, Isabelle & Szafarz, Ariane, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," World Development, Elsevier, vol. 42(C), pages 165-181.
    3. repec:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9531-x is not listed on IDEAS
    4. Jessica Schicks, 2011. "From a supply gap to a demand gap? The risk and consequences of over-indebting the underbanked," Working Papers CEB 11-046, ULB -- Universite Libre de Bruxelles.
    5. Lauren Kleynjans & Marek Hudon, 2016. "A Study of Codes of Ethics for Mexican Microfinance Institutions," Journal of Business Ethics, Springer, vol. 134(3), pages 397-412, March.
    6. Labie, Marc & Méon, Pierre-Guillaume & Mersland, Roy & Szafarz, Ariane, 2015. "Discrimination by microcredit officers: Theory and evidence on disability in Uganda," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 44-55.
    7. Kajenthiran. K & Achchuthan. S & Ajanthan. A, 2017. "A Quest for Seeking Microcredit among Youth: Evidence from an Emerging Nation in South Asian Region," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 7(2), pages 1-8.
    8. Akoété Ega Agbodji & Yélé Maweki Batana & Dénis Ouedraogo, 2015. "Gender inequality in multidimensional welfare deprivation in West Africa: The case of Burkina Faso and Togo," International Journal of Social Economics, Emerald Group Publishing, vol. 42(11), pages 980-1004, November.
    9. Tzu-Kuan Chiu, 2014. "Putting Responsible Finance to Work for Citi Microfinance," Journal of Business Ethics, Springer, vol. 119(2), pages 219-234, January.
    10. 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.
    11. D'Espallier, Bert & Guérin, Isabelle & Mersland, Roy, 2011. "Women and Repayment in Microfinance: A Global Analysis," World Development, Elsevier, vol. 39(5), pages 758-772, May.
    12. Joseph Petrick, 2011. "Sustainable Stakeholder Capitalism: A Moral Vision of Responsible Global Financial Risk Management," Journal of Business Ethics, Springer, vol. 99(1), pages 93-109, February.
    13. Kumar, Dr.B.Pradeep, 2014. "Access to Finance and Human Rights," MPRA Paper 80336, University Library of Munich, Germany, revised 2014.
    14. Arvind Ashta & Marek Hudon, 2009. "To whom should we be fair? Ethical issues in Balancing Stakeholder Interests from Banco Compartamos Case Study," Working Papers CEB 09-036.RS, ULB -- Universite Libre de Bruxelles.
    15. Maria Cecilia C. de Arruda & Luiza Granado, 2013. "Small-Sized Suppliers Entering Large Markets: An Ethical Initiative of the Caras do Brasil Program," Journal of Business Ethics, Springer, vol. 112(4), pages 685-696, February.
    16. repec:spr:soinre:v:133:y:2017:i:2:d:10.1007_s11205-016-1368-4 is not listed on IDEAS
    17. Kumar, Dr.B.Pradeep, 2016. "Institutional Response to the Problem of Access to Finance: Evidence from the Tribal Economy of Kerala," MPRA Paper 82430, University Library of Munich, Germany, revised 2016.
    18. Marco Tavanti, 2013. "Before Microfinance: The Social Value of Microsavings in Vincentian Poverty Reduction," Journal of Business Ethics, Springer, vol. 112(4), pages 697-706, February.
    19. David Hulme & Mathilde Maitrot, 2014. "Has Microfinance Lost its Moral Compass?," Brooks World Poverty Institute Working Paper Series 20514, BWPI, The University of Manchester.
    20. repec:bbz:fcpbbr:v:8:y:2011:i:1:p:1-26 is not listed on IDEAS
    21. Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto & Beatriz Cuéllar Fernández & Yolanda Fuertes-Callén, 2013. "Poverty penalty and microfinance," Working Papers CEB 13-029, ULB -- Universite Libre de Bruxelles.

    More about this item

    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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