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Microfinance in Ultra-Poor Communities: the Experience of Medellin

Following a nearly two decade experiment with neoliberalism in Latin America beginning in the early 1980s, the start of the new millennium saw a complete policy reorientation right across the continent. Neoliberalism was firmly rejected in one country after another, a process undertaken in tandem with the continent’s growing detachment from the economic-political-military grip of the USA. As in other continents, neoliberalism was rejected in Latin America largely because it failed to deliver anywhere near the promised levels of wealth and development: on the contrary, it appears to have worsened the already high levels of poverty, deprivation, deindustrialisation, informalisation and inequality that prevailed before 1980 (for example, see Weisbrot, 2006 ; Weisbrot, Baker and Rosnick, 2006 ; Navarro, 2007). Leaving aside the resource-rich countries of Mexico (oil and gas) and Brazil (raw materials and plantation agriculture), the neoliberal period has meant for most countries in Latin America a serious reversal of fortunes on almost all important social indicators. For some countries, notably Bolivia and Peru, the situation is dramatically worse. The level of poverty in both these countries reached historically unprecedented heights under neoliberal policies. Especially in Latin America’s growing urban areas, and most acutely of all in the rapidly growing ‘cities of slums’ (see UN Habitat, 2003 ; Davis, 2006), by the turn of the millennium the level of poverty and human suffering brought about by neoliberal policies had reached a crescendo.

Microfinance, local economic development, financial development in Colombia, social inclusion

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