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Press Release 11-118

Can Small Loans Reduce Poverty?

Yale University economist says microfinance yields surprising results

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Photo of vendors selling their goods at an open air market in the Philippines.

Vendors like these in this market in the Philippines can apply for and receive small loans of $100 to $500 dollars. This microcredit is designed to help extremely poor people engage in successful entrepreneurship and improve their quality of life. But new research says microcredit works in ways proponents don't expect.

Credit: Innovations for Poverty Action


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Photo of a woman standing at the door of her store.

Traditional microlenders target women who operate small-scale businesses and use group lending mechanisms. But the expansion of microlending means it often ends up looking more like traditional retail or small business lending that has the same impact on women and men.

Credit: Innovations for Poverty Action


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Cover of the June 10, 2011 issue of the journal Science.

The researchers' work is described in the June 10, 2011 issue of the journal Science.

Credit: Copyright AAAS 2011


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