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Title: The ethics of microfinance
Author: Sherratt, Lesley
Awarding Body: King's College London (University of London)
Current Institution: King's College London (University of London)
Date of Award: 2013
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Microfinance Institutions (MFIs) now reach 200 million people, mostly women without access to mainstream financial services living on, below and around the poverty line, with offers of small loans. The vast majority have as their twin objectives to alleviate their borrowers’ poverty and to enhance their empowerment. The paradox of microfinance is that a number of the practices used to achieve its objectives have the unintended consequence of undermining them. The concept that links the objectives of MFIs and the dangers in its practices is the relationship microfinance has with a borrower’s autonomy. The MFI intends that the loan increase autonomy by enriching and empowering the borrower. Its practices, however, can easily lead to charges of exploitation, coercion and paternalism, although in the latter case it is also argued that in certain areas they are not paternalistic enough. It is argued that these latter concepts are considered wrongful, when they are, just because of how they relate to autonomy. The structure of the thesis is thus to consider the concepts of exploitation, coercion, and paternalism and then apply these concepts to the practices of microfinance. The thesis concludes with an empirical survey of how far microfinance has in fact achieved its objectives of poverty reduction and empowerment, in order to judge whether the infringements on autonomy incurred in its practice can be justified. It then considers the extent to which the way the benefits and burdens of microfinance fall - those whose lives do indeed go better or worse after engaging with microfinance, and by how much - affects our judgement as to whether microfinance should be supported. Finally suggestions are made as to changes to practices that could be made so as to keep the pursuit of the ethical objectives, but minimise the risk of unethical practice in fact.
Supervisor: Wenar, Leif; Walsh, Patricia Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available