The Globalization Reader, 5th Edition

45 Poverty CapitalMicrofinance and the Making of Development

Ananya Roy

Fall from Grace?

In 2006, Muhammad Yunus and the Grameen Bank were awarded the Nobel Peace Prize. The prize brought new attention to the role of the Grameen Bank as a pioneer of microfinance. Those opposed to the Grameen model of microfinance had to acknowledge its contributions to development. “Yunus was one of the early visionaries who believed in the idea of poor people as viable, worthy, attractive clients for loans,” said Elizabeth Littlefield, CEO of CGAP, a donor forum based in the World Bank that advocates a market-based approach to development. And “that simple notion has put in motion a huge range of imitators and innovators who have taken that idea and run with it, improved on it, expanded it”. For a moment, the Washington consensus on poverty, anchored by institutions such as CGAP, seemed shaky.

The most elaborate celebrations unfolded at the Microcredit Summit held in Halifax, Canada, in November 2006. From the speeches to the imagery, the summit sought to promote the Grameen Bank's model of microfinance, showcasing an unyielding focus on human development and the role of microfinance in achieving such goals. Each session was inaugurated by a videomontage, the “Faces of Microcredit,” usually of a poor woman and how her life has been transformed by microfinance. “We are here because of the women,” announced Sam Daley Harris, director of the Microcredit Summit Campaign, at the opening ceremony. ...