One of the major criticisms of microfinance or microcredit is that the
A) loans are rarely repaid.
B) loans create a dependency on foreign handouts.
C) loans do not help grow businesses that can hire employees.
D) international community is not involved in making these investments.

Question

Quizplus · Accepted Answer

Critics argue that microfinance may not lead to sustainable job creation as the loans are typically small, and individuals may not be able to grow their businesses enough to hire additional employees. Instead, they may become trapped in a cycle of debt. However, there is evidence that microfinance can be successful in promoting economic growth and reducing poverty when coupled with other support services such as training and education. The other options (A, B, and D) are not accurate criticisms of microfinance as many microfinance institutions report high repayment rates, loans are not typically foreign handouts, and international organizations are involved in funding microfinance initiatives.

One of the Major Criticisms of Microfinance or Microcredit Is