Collective Action, Social Learning and Transdisciplinary Research
- Elgar original reference
Edited by Frank Moulaert, Diana MacCallum, Abid Mehmood and Abdelillah Hamdouch
Chapter 6: Microcredit as a social innovation
Microcredit is considered as an innovative system of lending aimed at financial inclusion of the poor. Hailed as a messiah by some and as a demon by others, it has, nevertheless, enabled more than 150 million families to take loans. Why is it a social innovation? And why has this social innovation gone where bankers feared to tread? Essentially, as this chapter details later, a novel system of group lending to women coupled with dynamic incentives led to steep reductions in risk and transaction costs, permitting the poor to be profitable customers. Microfinance is conceptualized and operationalized as a means of poverty alleviation. Poverty alleviation is the act of reducing the scourges of poverty of an individual or community. Principal factors identified by the literature as being responsible for poverty include market failure (economic exclusion), regional disparities (spatial exclusion), and low-status (cultural exclusion). These factors reinforce each other as components of deprivation and exclusion and have causal and dynamic connections (on these cumulative dynamics, see e.g. Antohi 2009).
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.