The Bright and Dark Sides of Microfinance

36 Pages Posted: 21 Feb 2014

See all articles by Mauricio Cervantes

Mauricio Cervantes

Instituto Tecnolo´gico y de Estudios Superiors de Monterrey

Miguel A. Montoya

Instituto Tecnológico de Estudios Superiores de Monterrey

Date Written: January 1, 2014

Abstract

This study analyzes the impact of microcredit on the life of women. Most of the literature has described the bright side of microfinance and how it helps women to improve their micro-firms. We argue that there is a dark side of microcredit that needs to be addressed. This dark side includes women being forced to take credit by their family, issues surrounding financial education, complaints about the Grameen model, marital disharmony, problems with children, etc. Additionally, benefits are kept mainly in the microfinance institutions due to the high interest rates they charge. To avoid this, some solutions are to have microfinance institutions involved in the community or having the father or legal guardian of the children acting as bank guarantor, inter alia. We tested these ideas on a sample of women micro-entrepreneurs in Mexico.

Keywords: Bottom of the pyramid strategies, microcredit, gender, empowerment, Mexico

Suggested Citation

Cervantes-Zepeda, Mauricio and Montoya, Miguel A., The Bright and Dark Sides of Microfinance (January 1, 2014). Available at SSRN: https://ssrn.com/abstract=2392491 or http://dx.doi.org/10.2139/ssrn.2392491

Mauricio Cervantes-Zepeda

Instituto Tecnolo´gico y de Estudios Superiors de Monterrey ( email )

Ramon Corona 2514
Zapopan, Jal. 45201
Mexico
+52 3336693000 (Phone)

Miguel A. Montoya (Contact Author)

Instituto Tecnológico de Estudios Superiores de Monterrey ( email )

Av. General Ramón Corona No.2514
Zapopan, Jalisco, 45201
Mexico
523336693000 (Phone)

HOME PAGE: http://www.itesm.mx/wps/wcm/connect/Campus/GDA/Guadalajara/

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