We Are Not Able to Live in the Sky: The Seductive Promise of Microfinance

Few ideas in the history of development have drawn as much attention from policymakers, academics, and the general public as microfinance. During the 1990s and the first decade of this century, microfinance enterprises such as Grameen Bank offered small loans of less than $100 primarily to poor women with the hope of unleashing their entrepreneurial energy. Microfinance was hailed as a panacea, a low-cost solution to ineptitude, corruption, and limited state capacity that could both help the poor and benefit socially conscious investors. As the journalist Kardas-Nelson shows in this impressive book, the true picture of microfinance was not nearly so rosy. With onerous interest rates averaging 35 percent and in some cases over 100 percent, borrowers regularly needed to take additional loans just to make payments. Unable to pay, some borrowers committed suicide. Kardas-Nelson provides an accessible and critical account of the dashed promises and ruined lives that microfinance left in its wake. She sketches, for instance, the lives of several women in Sierra Leone for whom microfinance entailed endless cycles of unpayable debts and the threat of imprisonment. This is a devastating story of mostly good intentions gone bad.