Battling a Wicked Problem
A school of thought hails microcredit as a social innovation, a messiah to enable people to help themselves out of poverty through entrepreneurship. An opposing school of thought considers microcredit as a capitalist demon ensnaring the poor in poverty and debt. The layman and the million professionals working in this industry are at a loss to make sense of the stories that circulate about microcredit. This book provides this sense-making, useful for students, professionals, investors and researchers who are attracted to this field.
Poverty is a wicked problem, akin to Hydra, the Greek mythological monster with many heads. As microcredit tries to balance multiple objectives to grapple with these multiple heads, it has needed to shift the weapons it uses. The arsenal for this battle has needed new philosophies, changing ethics, differing missions, institutional partnerships, the latest technologies and new products. These rapid innovations have differed in speed across the world, with adaptations in developed and developing countries. This book presents these with many case studies and field research.
It is clear that development initiatives, no matter how financial, cross academic disciplines. At the very least, they affect disciplines such as economics, business management, sociology, history, geography, politics, legal systems in place, as well as science, which is evolving at such a high speed. The book provides this multidisciplinary view and motivates future research and practices.
List of Tables
Table 1.1: Social Innovation characteristics of Microcredit
Table 1.2: Regional distribution of microcredit
Table 1.3: Return on Assets in the Microfinance industry
Table 1.4: Loan loss rate in microcredit
Table 1.5: Example of Effective Interest Rates depending on payment terms
Table 1.6: Evolution of the Yield of MFIs
Table 2.1: Some salient Institutional Features of North African countries
Table 2.2: Evolution of Microcredit in Morocco, Egypt and Tunisia
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