Microcredit as a Grass‐Roots Policy for International Development

The failure of top‐down development policies in the Third World has given rise to a variety of grass‐roots, or bottom‐up, development strategies to combat the severe poverty that continues to plague developing countries. Among these grass‐roots approaches, microcredit has grown rapidly in popularity, scope, and impact over the last two decades. Microcredit provides financial capital for poor entrepreneurs who toil in the informal, poverty sectors in developing country economies. In addition to the thousands of predominantly nongovernmental organizations that offer microcredit programs, many national governments in the Third World are now seeking to integrate microcredit strategies into their development policy and planning. Accordingly, this article examines the microcredit movement, including its rationale and underlying premises, its impact on the poor, and its role in development policy.