As the report, “ >Microcredit no panacea for poverty : study” (Jan.25) shows, extending microcredit has not resulted in any significant alleviation of poverty or empowerment of women. This event has an important implication: giving money is not enough to tackle poverty. Living standards and consumption cannot be improved by only providing resources like money. Women in India and other developing countries have always found it difficult to be financially and socially independent due to the social stereotypes entrenched in society. There should be a focus not only on providing these women with financial resources but also on their actual social conditions. The effort made to empower women is praiseworthy. However, it has to be seen that the financial resources provided translate into real-life improvements. One also has to consider how a simple credit-line may not be sufficient for a woman who cannot work due to a disability. Social conditions have to be incorporated in poverty alleviation schemes if we really want to alleviate poverty in India.
Anurag Gupta,
Hyderabad
The idea that microcredit has successfully helped in poverty alleviation is just a delusion. There are some positives, but it has failed on other counts such as enhancing investment in small businesses, improving health and education, and leading to social empowerment. This failure of microcredit will also prove a disappointment to lenders when they find that there is no actual improvement in the living conditions of the poor. If we really wish to enhance the status of the poor, there is a need to bring in a policy that gives a better guarantee that the targets would be met. It should not be assumed that extending microcredit would necessarily lead to the fulfilment of the targets we had set. The approach towards framing such a policy should aim at encouraging start-up investments. It should also include more direct and easy access to goods and services. Policymakers should also not neglect the fact that for the poorest of the poor, investments will not be the top priority because of their very low income-levels. Hence policies must be framed taking into account their real needs.
Isha Kabra,
Hyderabad
