Microfinance — small loans and global poverty

Microfinance promised to end poverty by giving the poor access to credit — a diagnosis that correctly identified exclusion from capital as a barrier, but underestimated how much more than a loan is required to build a sustainable livelihood. The results, in aggregate, are more modest than the early rhetoric suggested: credit is useful, but it does not by itself replace the infrastructure, markets, and stability that poverty also destroys. The tool is real; the theory of change was too thin.