But recent research in villages of Tamil Nadu, South India, suggests that microfinance is not automatically empowering, and that poor people can be vulnerable when caught up in unequal power relations with banks and local organisations implementing credit-based development schemes. How microfinance actually works depends on a web of formal and informal relationships between bank managers, NGOs, local officials and women's groups, which can distort the original aims and create tension and conflict. This Research Summary considers the issues.
This is a two-page summary of a paper which can be accessed in full on this page.
Brighton, UK: Institute of Development Studies, 2 pp.