Impact
Microcredit is being justified by its positive impact on poverty reduction, income, consumption, the creation of businesses, education and health, the empowerment of women and the empowerment of the poor in general.
Critics argue that microcredit has driven poor households into a debt trap, that the money from loans is used for consumption, that men actually use the money for which their female relatives get into debt and that microcredit does not alleviate poverty or improve health and education.
At the 2008 Innovations for Poverty Action/Financial Access Initiative Microfinance Research conference, economist Jonathan Morduch of New York University noted there are only one or two methodologically sound studies of microfinance's impact. Grameen Foundation has released two papers summarizing the state of research on the impact of microfinance on poverty: "Measuring the Impact of Microfinance, Taking Stock of What We Know" by Nathanael Goldberg (now with Innovations for Poverty Action) and an update, "Measuring the Impact of Microfinance: Taking Another Look" by Professor Kathleen Odell. These two papers identify scores of findings indicating positive impact in research conducted over the last twenty years, as well as some findings that suggest limited or negative impact in some cases.
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