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David Roodman's Microfinance Open Book Blog

Draft chapters, burning questions, useful sources.

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David Roodman's Microfinance Open Book Blog

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Distrusting the Debtor

A central question in judging microcredit: When can we as creditors trust the judgment of the poor as borrowers? These days we can all reel off examples of unwise borrowing in rich countries (though I daresay unwise lending is more to blame for the current crisis). Do the world's poorest people, with less margin for financial folly, borrow more prudently? Two things I've read recently tend toward opposite answers to this question.