Microfinance, A Downside?

Microfinance in Africa!

Tim, I have a question for ya:

Since 1961 when US AID was started there have been many criticism--it is used for political purposes, through inflated costs most of the reward goes to the contractors supplying the food, the aid is used by the receiving nation as a means of control, and perhaps the most important--it doesn't do much to end poverty. So, while there may be good intention of giving people in refugee camps bags of rice it can become a means of engendering poverty and empowering those who control the aid.

Along comes micro finance and on the surface it avoids many of these faults. But here lies my question; in 10-20 years what will be the criticism of micro-fiance?

How about disparity? While some people receive funding it may be so concentrated and so powerful that those who receive funding become the future business owners and those who don't are left out to dry. So while some people have raised themselves out of poverty it has done little or nothing to decrease the gap between the rich and the poor.

Another idea is that instead of fostering business growth it creates an all powerful microfinance loan operation where the only success in a town flows from those who microloan. The poverty declines, but instead of being at the mercy of colonialism they're at the mercy of banks that become too big to fail. (had to say it)

I'm interested to see what your thoughts are out in the field. Hope you're enjoying the beach in Kenya!

-Anthony