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Microlending

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Submitted By raconn
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Microlending is a very hot topic in the world of international aid. This idea has seen an overwhelming amount of support from both those who work in the field and those who simply take minor interest. However, recently, the concept of microlending—or microcredit—has seen a bit of disapproval from experts in international aid and lending. Many people, on the other hand, have an optimistic amount of faith and approval for the idea of microlending and that support is not warranted. Microcredit is pretty typical of the micro approach to aid and is greatly supported by William Easterly. This is the type of program that very literally delivers aid in small amounts in hopes of accomplishing the great feat that is ending poverty. Although the amount of initial aid is small, the incentive it offers can lead to a successful social program. If an individual is given the opportunity to receive a loan, then there is an incentive that if one works hard and is successful, they have the chance to no longer live in poverty. Again, this is the type of aid that Easterly supports in his writings and theories as far as international aid goes. I personally believe that William Easterly and Mohammad Yunus are on the right track when it comes to sticking by microlending. The pros greatly outweigh the cons, and the benefits can be so significant that it would be silly and juvenile to write off a project with so much potential this early on in the game. While I understand where Dean Karlan is coming from when he says that “Microcredit is not transformational” [Bennett, 2009], I do think given time and trial it has the potential to be. And—thus far—statistics prove that it is doing almost no harm. With a 98% repayment rate [Bennett, 2009], why not give the people and the microlending program a chance to be successful and a chance to take initiative. Overall, so many professionals really truly believe that this program is worth the time and resources spent and a hail it as a total success [Bennett, 2009]. So many experts would not support the program if it did not work, and in my opinion, there will always be naysayers. In the end, the statistics speak for themselves and the hope the microcredit programs bring to struggling, poverty stricken communities is enough to say that it is all worth it. Despite the level of transformation or great success, it is what is working now and it might be what works in the future to facilitate transformative change.

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