Modest Loans Leading to Monumental Change: The Promies of Microcredit as a Development Tool in Nicaragua
AbstractNicaragua is in need of a development policy that can simultaneously facilitate equitable growth and work to alleviate poverty. This paper will synthesize journal articles and show that past policies (such as exportpromotion, import substitution industrialization, and structural adjustment and stabilization pursued through the Washington Consensus) have focused on growth and output, but neglected income inequality and poverty reduction in the region. Such policies caused a short-term austerity that led to human suffering and may not have been necessary to build growth. Microeconomic policies may provide useful alternatives to the macroeconomic austerity programs. The microeconomic policy examined as an option in this paper is that of using microcredit to fund microenterprise.
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