Alexander Cockburn dispels the myths of the microloan which have gotten so much press lately due to Mohammed Younus winning a Nobel prize. Cockburn asks basic questions about the effectiveness of the microloan including why the countries that have them aren’t bringing people out of poverty, where the money to repay microloans comes from and goes, and what is the future of the microloan when state-owned and commercial banks offer microloans.

As the economist Robert Pollin put it pithily when I asked him what he thought of the award to Younus , Bangladesh and Bolivia are two countries widely recognized for having the most successful micro credit programs in the world. They also remain two of the poorest countries in the world.

In the statistical tables of human development Bangladesh ranks 139th, worse than India, with 49.8 per cent of its population of 150 million below the official poverty line. In the homeland of the Grameen Bank, about 80 per cent of the people live on less than $2 a day. A UN Development Program study in the early 1990s showed that the total microcredits in Bangladesh constituted 0.6 per cent of total credit in the country. Hardly a transformation.