A Free Market Solution to Helping the World’s Poor

Elizabeth Hamrick / October 04, 2010

A featured op-ed in The Wall Street Journal last week documented the recent, surprising successes of Bangladesh. Henry Kissinger dubbed it a “basket-case” at its inception. It has little economic freedom, and many in the international community saw little hope for it, but it has made some large achievements in recent years. The economy is on an upward spiral, birth rates are down, and commendable progress has been made in tackling the influence of Islamist extremism in a Muslim majority country.

The current government has helped with these upswings, but there is a stronger and more influential force in this equation: the effect of microfinance. First conceived of as a tool to alleviate the widespread poverty plaguing the country, it is a process in which small loans are issued to people, mainly women, with little or no collateral which they are obligated to pay back with interest. (more…)