Milford Bateman in The Conversation:
[T]he microcredit movement quickly elevated the supposed poverty reducing power of self-help and individual entrepreneurship to almost miracle status. To escape poverty, the poor no longer needed state intervention and other forms of “collective capability” such as trade unions, public ownership and strong regulations.
Only one last hurdle had to be overcome before the global triumph of microcredit. A core aspect of the new neoliberal agenda was its emphasis on the need for all institutions in society to be financially self-sufficient and profit oriented. Subsidies and public investment were bad words.
The heavily subsidised Grameen Bank-style microcredit industry clearly could not survive under the new neoliberal “self-sufficiency” paradigm. Led by USAID and the World Bank, the microcredit model was therefore extensively commercialised, privatised and liberalised.
It was essentially developed into a for-profit private business model. Microcredit was turned into a business, but one imbued with a crucial social goal – poverty reduction. With this important change secured, the microcredit industry began a very rapid expansion.
By the mid-2000s the model was being described as the most effective anti-poverty and “bottom-up” development intervention of all time. With support from both the left and the right of the political spectrum, the UN agreed to nominate 2005 as the UN Year of Microcredit.
And then it all began to go horribly wrong.