The Seductive Promise of Microfinance
Starred review from April 15, 2024
Microfinance, a novel approach to financing small-scale business ventures in the developing world “that had promised to uplift millions,” may have “quietly died” in the Western media, writes journalist Kardas-Nelson in her eye-opening debut exposé, but meanwhile it’s been wreaking havoc around the globe. Throughout the 2000s, microlending—the issuing of tiny loans to aspiring small business owners—was widely celebrated, earning its progenitor, banker Muhammad Yunus, the Nobel Peace Prize. However, by the time Kardas-Nelson traveled to Sierra Leone in 2015 for a job with a health organization, the hype had ended and, quite literally, the bill had come due. Learning from locals that it had become routine for women (the scheme’s original intended beneficiaries) to be arrested and imprisoned over microfinance debts, Kardas-Nelson decided to investigate. Through extensive archival research, she pieces together an account of the 20th-century rise of microfinance as part of America’s “international development” apparatus, revealing how starry-eyed American “activists, feminists, and funders... create the conditions” for today’s global predatory lending problems. She also profiles women in Sierra Leone and Bangladesh struggling to pay off microfinance debts, reporting that a mere three out of the 100 businesswomen she interviewed believe the loans had actually helped them. Kardas-Nelson’s crisp characterizations and novelistic storytelling bring clarity to a sprawling, shadowy history. The result is a devastating look at a disaster set into motion by misguided American policymakers.