Finance & economics | Microfinance in Bangladesh

Rehabilitation and attack

The biggest study so far finds that microcredit helps the poor after all

FOR years the reputation of microfinance—which gives tiny loans to the poorest—rose and fell in tandem with relations between Grameen Bank and the Bangladeshi government. In 2006 the bank and its head, Muhammad Yunus, won the Nobel peace prize for reducing poverty and Mr Yunus toyed with setting up a political party, supposedly with the government’s blessing. Since then several studies have found limited or no benefits from microfinance, and in 2011 (for different reasons) a new government forced Mr Yunus to resign from the bank he had founded.

Now the pattern has been broken: on April 6th the government took one more step in its assault on the bank by taking the power to appoint its own board members away from Grameen and giving it to the central bank. This has happened just as the biggest study of microfinance so far, by the World Bank*, rehabilitates the reputation of the practice as a means of helping poor people, especially women.

This article appeared in the Finance & economics section of the print edition under the headline "Rehabilitation and attack"

Insatiable

From the April 19th 2014 edition

Discover stories from this section and more in the list of contents

Explore the edition

More from Finance & economics

How Ukrainians are using the cover of war to escape taxes

“Black grain” infuriates exporters playing by the rules

What campus protesters get wrong about divestment

Will withdrawing money hurt Israel?


Hedge funds make billions as India’s options market goes ballistic

The country’s retail investors are doing less well