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The problems (and promise) of microfinance

Just three decades ago, billions of people around the world were stuck in a trap. Faced with low incomes on the one hand and exploitative loan sharks the other, they could neither save for the future nor purchase the capital required to generate a living. This changed with the pioneering work of Mohammad Yunus in Bangladesh, and with the establishment of the Grameen Bank in 1983, microfinance was born. 

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Microfinance and Social capital

Many of us are already probably familiar with what is known as ‘microfinance’ (see ‘Microcrisis’ by Hanbo Li), but what about social capital?  Social capital has been defined by many scholars. To take one famous instance, Putnam in his book ‘Making Democracy Work : Civic Traditions in Modern Italy’  defined social capital as “features of social organizations, such as trust, norms and networks, that can improve the efficiency of society by facilitating coordinated actions”.

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