Critiques of microcredit claim that it has replaced social networks of survival with "empowerment debt" which has proven to be a double-edged sword because ______.
A) it created new dependencies reflecting gender and class inequalities
B) loans often are used to meet daily consumption needs
C) there are intergenerational effects of the debt, with young girls taken out of school to make loan payments
D) it exploits the middle class to support loans for the poor.

Question

Quizplus · Accepted Answer

Microcredit has been criticized for perpetuating inequalities and creating new dependencies. The loans are often used to meet daily consumption needs, rather than for productive investment. As a result, the debt can become a burden, leading to intergenerational effects such as young girls being taken out of school to make loan payments. Additionally, microcredit programs have been accused of exploiting the middle class to support loans for the poor. These issues have led some to question the effectiveness of microcredit as a tool for poverty reduction.

Critiques of Microcredit Claim That It Has Replaced Social Networks