Little publicized problems with micro-credit

This is a bit off-topic for a blog about technology, but I posted yesterday about micro-credit financing helping people in Bangladesh setup phone business and want to follow-up with something I’ve found. Micro-credit has been touted as a great capitalist solution to poverty. A small loan and hard work should be enough to help people pull themselves out of poverty, right? Unfortunately not everyone is able to turn the loan into a successful business and there has been very information about the flip-side of this supposed wonderful idea.

France 24, a french television station did an investigative reporting piece on what happens when the poor take out the micro-credit loans and can’t pay them back. Loan officers of the Grameen Bank, the pioneer of micro-credit, are dispatched to do what they can to get the loans repaid. The poor residents of these villages are threatened with the loss of their homes and the few things of value that they own, and have no way to repay. Loan officers even persuade them to take more loans to try again to make money.

This all comes through the France 24 story, I’m sure there much more to the story, but this is quite troubling.

via Gawker