ABSTRACT
The modern microcredit movement was established in the 1980s with the decisive help of the international development community and the US government, both of which saw the microcredit model as a brilliant way of finally ‘bringing capitalism down to the poor’. Thanks to a wave of favourable publicity and supportive economic analysis and impact studies by mainstream economists, by the mid-2000s the microcredit model was probably the most popular and well-known anti-poverty intervention of all time. Things then began to go quickly wrong, however, mainly as a result of the microcredit model’s increasing commercialisation from the 1990s onwards. This new direction predictably led to the microcredit model being taken over by a narrow financial elite that saw it could be used as a new way of extracting significant value from the poorest communities in the Global South under the useful cover of providing microcredit in order to ‘help the poor’. Eventually, even one-time leading microcredit advocates were led to concede that the microcredit model actually had failed. As a result, new narratives and goals have had to be constructed in order to maintain support for the microcredit model, notably involving its quiet incorporation into the wider financial inclusion movement.
