The Ethics of Micro Finance
Christopher Martin
‘Micro-finance programmes are aimed at reducing poverty.
What ethical challenges are raised by the operation of micro-finance and
which ethical theory can best be applied to assess how Grameen Bank addresses these
challenges?’
Introduction:
The essay seeks to examine the ethical issues raised by the operation of microfinance. In the first section, an overview will be offered. In the second section the ethical challenges posed by operation of micro-finance will be examined. In the third section, an overview of Grameen Bank will be given. Finally, in the fourth section, the ethical theories of Kant, Bentham and Aristotle will be applied to the ethical issues raised by the operation of Grameen Bank to see which theory best applies.
1. What is micro-finance?
Conventional banks like we in the west know are not as widespread in the developing world. Even in places where there ‘mainstream’ banks do have operations, large numbers of people will not be in a position to utilise their services. Such people have been termed the ‘unbankable poor’. The World Bank estimates that there are 2.7 billion people (nearly 40% of world’s population) who do not have access to formal financial services. Microfinance has emerged in the last few decades in response to the needs of such people for savings and loans facilities. It is an alternative to them have to use the services of what are colloquially termed ‘loan sharks’, who charge high rates so high that borrowers struggle to pay off the principal sum borrowed.
Micro-finance is the provision of savings facilities and small value loans to typically to poor people in the Third World. Such people have a need for financial services, particularly as there is a lack of in rural areas where there is a lack of banking facilities. This makes it harder to makes deposits and so build up any sort of savings. For instance
1 ”if you
‘Micro-finance programmes are aimed at reducing poverty.
What ethical challenges are raised by the operation of micro-finance and
which ethical theory can best be applied to assess how Grameen Bank addresses these
challenges?’
Introduction:
The essay seeks to examine the ethical issues raised by the operation of microfinance. In the first section, an overview will be offered. In the second section the ethical challenges posed by operation of micro-finance will be examined. In the third section, an overview of Grameen Bank will be given. Finally, in the fourth section, the ethical theories of Kant, Bentham and Aristotle will be applied to the ethical issues raised by the operation of Grameen Bank to see which theory best applies.
1. What is micro-finance?
Conventional banks like we in the west know are not as widespread in the developing world. Even in places where there ‘mainstream’ banks do have operations, large numbers of people will not be in a position to utilise their services. Such people have been termed the ‘unbankable poor’. The World Bank estimates that there are 2.7 billion people (nearly 40% of world’s population) who do not have access to formal financial services. Microfinance has emerged in the last few decades in response to the needs of such people for savings and loans facilities. It is an alternative to them have to use the services of what are colloquially termed ‘loan sharks’, who charge high rates so high that borrowers struggle to pay off the principal sum borrowed.
Micro-finance is the provision of savings facilities and small value loans to typically to poor people in the Third World. Such people have a need for financial services, particularly as there is a lack of in rural areas where there is a lack of banking facilities. This makes it harder to makes deposits and so build up any sort of savings. For instance
1 ”if you