The question of poverty alleviation holds center stage for development theorists and practitioners around the world. They use cooperative, cottage industry, income-generation, microcredit, and macro development schemes to combat this global problem. However, in spite of their efforts to change the economic and social reality of the poor, often it fails to create lasting impact.
Out of all the options for poverty relief, the latest buzzword in development is free-market microcredit, which boasts thousands of loans and little donor investment and provides empowerment through entrepreneurship. Despite these enticing assertions, it has failed to become the panacea to world poverty. While effective in many cases, microcredit has been unsuccessful in others.
For example, it has been disastrous in some rural populations, because it fails to provide the business, distribution, and skill-building support so desperately needed. Critics of microcredit also suggest that it often produces cycles of dependency, rather than the independent entrepreneurs it claims to create. As Kennedy Center graduate students in the International Relations program, we have observed examples of this in our experiences.