Naslov
Microfinance in Ultra-Poor Communities: The Experience of Medellin, Colombia

Autori
Bateman, Milford ; Duran-Ortiz, Juan-Pablo ; Sinkovic, Dean

Vrsta, podvrsta i kategorija rada
Poglavlja u knjigama, znanstveni

Knjiga
Confronting Microfinance: Undermining Sustainable Development

Urednik/ci
Bateman, Milford

Izdavač
Kumarian Press

Grad
Sterling (VA)

Godina
2011

Raspon stranica
25-48

ISBN
978-1-56549-437-4

Ključne riječi
Microfinance, Local Economic Development, Economic Policy, Poverty Reduction

Sažetak
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. The microfinance sector in Colombia has rapidly increased in the last two decades and many hoped that it would impact strongly on poverty and underdevelopment. Our research to date leads us to suggest that microfinance has had a mixed impact. Some individuals have been assisted into a new microenterprise that has been able to help them escape the worst forms of poverty. Short of a major survey of both clients and non-clients, we simply do not know how representative these gains are. However, the data collected by the Finantial Bureau seems to indicate that the gains are minimal if not absent. Hyper-competitive local markets are the one obvious result of more microfinance in recent times, and this is associated with declining prices and volumes, and so also declining margins and wages for the bulk of market participants. Moreover, it has not been possible in our work to date to explore the opportunity cost of microfinance in Colombia – the alternative policy intervention targeted at the same client groups using the same funds. Nonetheless, given the very poor growth and survival prospects for most microenterprises operating in the very poorest and most ‘saturated’ localities in Colombia, it is difficult not to speculate that alternatives microfinance might just have produced a far more robust and sustainable outcome. At any rate, few would argue other than that the emerging economic structure of petty trade and service operations is a wholly inappropriate base in terms of securing sustainable local development and poverty reduction. Among other things, therefore, we have helped to illustrate why it is that Hernando De Soto’s core ideas concerning the ‘power’ of microenterprises to reduce poverty have actually proven to be a miscalculation. The informal sector has actually doubled over the last two decades or so in Latin America, yet urban poverty and human deprivation has been intensified everywhere as a result, including in Colombia. Instead, we would agree with Flórez (2002) who concludes that the urban economy of Colombia is evolving into, on the one hand, a small, well paid high productivity industrial sector, and on the other hand, a very much larger and growing low productivity, unskilled urban-based informal economy with few real possibilities to secure poverty reduction and development. Moreover, unfortunately, as the Wall Street-precipitated global financial crisis has begun to work its way around the globe, it appears that the average urban economy in Colombia is likely to be undermined even further in the years to come.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA