When the Nobel Peace Prize was awarded to Bangladeshi economist Muhammad Yunus in 2006 for his concept of microfinance, it brought what began as a local policy experiment in the 1970s to global attention.

Microfinance programmes – small-scale lending programmes targeted at low-income households that normally fall through the cracks of formal lending systems – were supposed to provide the poor with the capital they need to open a street stall, invest in their farmland, or buy materials to make handicrafts.

Up until the late 2000s, microfinance was hailed as a financial magic bullet by many. It would lift the world’s poor out of poverty and empower women. Only, it hasn’t quite turned out that way.

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