I instantly became a fan of micro-credits when I first heard about the idea. It seemed to be a perfect way to get people out of poverty: loans to small businesses in under-developed part of the world. Business, exchange, trade, and the ability to sustain oneself is what lift people out of poverty: not charities, and government hand-outs. Micro-credits fit nicely my view of the world: individuals stepping up to raise their standard of living with help from non-governmental bodies.

Planet money posted an article about micro-credit, or more precisely about studies to determine how effective micro-loans are. It turns out it was a lot of hype, and not a lot of result. It doesn’t look like micro-loans improve much the standard of living of those who benefit from it.

It’s disappointing, but after thinking about it for a while it seemed foolish to think that small sums of money here and there could have a significant impact on the lives of those who live in poverty.