Microcredit

Over break I was speaking with one of my wife’s relatives and she asked me about my opinion on micro-credit programs like the Grameen Bank. For my next week’s class I’m having my student read an essay Karol Bourdeaux and Tyler Cowen.
If you want a great overview, I suggest you read it. If you want the key point here it is:

“Bang¬la¬desh, where Gram¬een Bank was born, is still a desperately poor country. The more modest truth is that microcredit may help some people, perhaps earning $2 a day, to earn something like $2.50 a day. That may not sound dramatic, but when you are earning $2 a day it is a big step forward. And progress is not the natural state of humankind; microcredit is important even when it does nothing more than stave off ¬decline.”

Development economics is difficult there is no easy answer, but yes microcredit is helping, but it is just one of many things that needs to be done.