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Open Access Publications from the University of California

Microcredit and the Financial Frontiers of Racial Neoliberalism


Over the past decades of neoliberal globalization, microcredit has been a widely supported project that claims to address global poverty, inequality, and uneven development through debt-based solutions involving small interest-bearing loans that can be used to fund small-scale business entrepreneurship. Microcredit’s promise, though never fulfilled, reflects an approach to development within a broader shift toward financial capitalism, privatization through individualized debt creation, and shrinkage of the social state. Moreover, microcredit (more broadly, microfinance) seeks legitimation in narratives of inclusion, participation, and gender empowerment. In fact, social capital belonging to the targeted populations of microcredit programs in the “global South” is itself often tapped in the service of value extraction. This article forwards a view of microcredit as operating within a logic of racial capitalism. The approach seeks to ground critiques of microcredit’s core neoliberal elements within a longer history and broader appreciation of racialized and colonial structures of finance.

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