Micro-finance can make the poorest poorer, study warns: The Institute of Education has praised micro-finance as a means of reducing poverty, but warns that caution must be used when lending to the very poorest.
In a Department for International Development-commissioned report that compiles worldwide data, researchers from the EPPI-Centre at the Institute of Education, University of London have concluded that micro-credit can end up making people poorer as well as better off – and in fact the poorer the borrower is, the more in danger he or she is of suffering in the long term.
Micro-credit – giving minor loans for establishing a small business, such as a market stall – is designed to be a stable way to help people out of poverty.
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