Acton Institute Powerblog

Microfinance Challenged

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PowerBlog has in the past endorsed the concept of micro-loans as a market-friendly and thereby effective way of aiding the poor, especially in developing countries.

Now Arneel Karnani has attacked microfinance in a prestigious publication, largely on the basis of macroeconomic data.

Over at Business as Mission Network, microfinancier Peter Greer supplies a thorough and fascinating response to the charges.

Certainly any movement needs it critics and Karnani scores some genuine points, but it seems to me that Greer’s rebuttals are on the whole convincing. Micro-loans won’t eliminate poverty, but they play an important role in its alleviation—and in the rehabilitation of the dignity of the individuals who are able to take responsibility for their economic welfare.

Kevin Schmiesing Kevin Schmiesing, Ph.D., is a research fellow for the research department at the Acton Institute. He is a frequent writer on Catholic social thought and economics, is the author of American Catholic Intellectuals, 1895-1955 (Edwin Mellen Press, 2002) and is most recently the author of Within the Market Strife: American Catholic Economic Thought from Rerum Novarum to Vatican II (Lexington Books, 2004). Dr. Schmiesing holds a Ph.D. in American history from the University of Pennsylvania, and a B.A. in history from Franciscan University ofSteubenville. Author of Within the Market Strife and American Catholic Intellectuals, 1895—1955 (2002), he serves as Book Review Editor for the Journal of Markets & Morality. He is also executive director of CatholicHistory.net.

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