Rume: Rural Microfinance and Employment

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> Microfinance, Financial Inclusion and Social Responsibility

Microfinance, Financial Inclusion and Social Responsibility

in de H.-C. Bettignies and F. Lépineux (eds), Finance for a better world. The shift toward sustainability, London: Palgrave Macmillan, pp. 7-29.

The main purpose of the paper is to demonstrate that a study on social responsibility in the field of microfinance is absolutely essential, for several reasons. It is first of all indispensable in order to avoid illusions about the supposed virtues and merits of microfinance in the fight against poverty. Microfinance is often considered a tool in the fight against poverty while it has to be understood first and foremost as a tool against financial exclusion. This clarification is essential and the term "financial inclusion" is much more appropriate than "microfinance". To equate microfinance with the fight against poverty is extremely dangerous. Not only is microfinance, unfortunately, poorly equipped to really fight against poverty, but even more so, this confusion of objectives leads many stakeholders (not only microfinance organisations, but also commercial banks and investors) to adopt practices not very compatible with effective action in the fight against poverty. To question the social responsibility of all the stakeholders involved in financial inclusion policies is therefore also indispensable to avoid improper practices.

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Latest edition: 16 August 2010

FOFIFA IRD ANR CIRAD CIESAS LPED Fondation FARM French Institute of Pondycherry UMR MOISA