A microcredit crisis: development vs. profit.

63 p.Microcredit originally emerged as a panacea to problems of the poor and has grown over the years as both a viable business sector and a tool for social development. Around the globe, micro creditors are being viewed in a negative light. India has experienced one of the fastest growths in the microcredit sector, and is currently the world's largest market, but micro lenders are being accused of achieving this growth and success by exploiting the poor. The home of microcredit, Bangladesh, is also plagued with problems of exploitation and abuse of the poor by micro lenders. Microcredit practiced in business principles has overlooked social development and focused on financial returns alone. In this paper I will analyze all these issues as I answer why microcredit industry is in crisis in India. This crisis is not an isolated incident and tells us about a global problem of microcredit. In this paper I will highlight, through the example of India and Bangladesh, how wrong practice of microcredit can lead to a disaster for micro lenders and especially the poor borrowers.Master of Science (International Relations