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Microfinance and the business of poverty reduction: Critical perspectives from rural Bangladesh

Banerjee, S. B. and Jackson, L. (2017). Microfinance and the business of poverty reduction: Critical perspectives from rural Bangladesh. Human Relations, 70(1), pp. 63-91. doi: 10.1177/0018726716640865

Abstract

In this article we provide a critical analysis of the role of market-based approaches to poverty reduction in developing countries. In particular, we analyse the role of microfinance in poverty alleviation by conducting an ethnographic study of three villages in Bangladesh. Microfinance has become an increasingly popular approach that aims to alleviate poverty by providing the poor new opportunities for entrepreneurship. It also aims to promote empowerment (especially among women) while enhancing social capital in poor communities. Our findings, however, reflect a different picture. We found microfinance led to increasing levels of indebtedness among already impoverished communities and exacerbated economic, social and environmental vulnerabilities. Our findings contribute to the emerging literature on the role of social capital in developing entrepreneurial capabilities in poor communities by highlighting processes whereby social capital can be undermined by market-based measures like microfinance.

Publication Type: Article
Additional Information: Copyright Sage 2017
Publisher Keywords: microfinance, NGOs, non-governmental organizations, poverty reduction, social capital, vulnerability
Subjects: H Social Sciences > HG Finance
Departments: Cass Business School > Management
URI: http://openaccess.city.ac.uk/id/eprint/16138
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