Contemporary Microenterprise
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Contemporary Microenterprise

Concepts and Cases

Edited by Joseph Mark S. Munoz

While there have been numerous books and articles written on the popular topic of ‘microfinance’, few books have been written on the business model behind it: the ‘microenterprise’. Due to its diversity of thought and high quality of chapter contributions, this book is poised to be the book on ‘microenterprises’. Contemporary Microenterprise is a collage of the latest research and viewpoints on the subject by recognized academics and experts from around the globe.
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Chapter 21: Microfinance and Poverty Alleviation: Underlying Values and Assumptions

Laurence Romani and Lin Lerpold


Laurence Romani and Lin Lerpold INTRODUCTION As evidenced by the intensity of public media accounts, United Nations focus, Nobel Peace Prize awards and institutional expansions, “microfinance” is viewed as the panacea to sustainable development and poverty alleviation. It is estimated that there are between 130 million and 190 million microcredit borrowers and that the annual growth rates exceed 20 per cent (Stephens, 2009). The “microfinance promise” (Morduch, 1999) builds on the hope that poverty can be alleviated, and that social and economic structures can be transformed by providing financial services to the poor. Cornerstones involve “bottom-up” aspects, including attention to community, focus on women, and helping the underserved. Subsidies are replaced by institutional and client “win–win” propositions through incentives to work, non-governmental leadership, entrepreneurship in microenterprises and the application of market-driven ideologies. The current popularity of microfinance is partly supported by anecdotal success stories of microentrepreneurs lifting themselves out of poverty. Microfinance institutions, such as the Grameen Foundation, provide numerous accounts in their websites. In this chapter, we aim to contribute to the “microfinance promise” by providing a reflective standpoint on these stories, and their implicit underlying values and assumptions. While some have already addressed limitations of microfinance practices (see for example Gulli, 1998; Dichter and Harper, 2007; Ahmad, 2007), we focus on the microfinance discourse, especially the success stories of women lifting themselves out of poverty. We take a “critical” approach (Deetz, 1996; Alvesson and Deetz, 2000) in “dissensus” with the prevailing discourses on microfinance, which we label...

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