Development and the Role of Microcredit |
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| Authors: | Douglas R Snow Terry F Buss |
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| Institution: | assistant professor in the Department of Public Management at Suffolk University in Boston. He earned his doctorate at Northern Illinois University. He has previously worked in state government and higher education administration. At present, he teaches courses in public finance and does research in the fields of government budgeting, economic development, and the problems of developing countries.;professor and Chair in the Department of Public Management at Suffolk University in Boston. He holds a doctorate in political science from Ohio State University. He has written 10 books and more than 200 professional publications in the fields of entrepreneurship, economic development, and related policy areas. Recently, he returned to Boston after serving as a Visiting Scholar in Entrepreneurship Research at the Congressional Research Service, Library of Congress in Washington, DC. |
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| Abstract: | Microcredit is a concept that has gained widespread acceptance by international development agencies and major donors. It is viewed as a way to correct both governmental and market failure in Sub-Saharan Africa. Many view microcredit as a method for linking the formal and informal sectors of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through microcredit is possible, and desirable, depending on macroeconomic reforms, respect for traditional financing relationships, and local control of institutions. However, very little has been done to determine the extent to which microcredit programs actually increase economic well-being. The model program, Grameen Bank of Bangladesh, has been studied and evaluated, but replications may not be inherently successful. The literature accepts that microcredit will increase economic well-being, if programs are correctly designed. Program design issues cannot be resolved, however, until economic well-being is measured and associated with specific designs. |
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