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Is it Evil to Profit from the Poor?

The rising popularity of microfinance has given way to new discussion concerning the ethics of profiting from the poor. It's a question raised in a Reuters analysis published today.

The rising popularity of microfinance has given way to new discussion concerning the ethics of profiting from the poor. It's a question raised in a Reuters analysis published today.

In an Insurance & Technology blog post, Anthony O'Donnell explores the concept further:

It's an interesting question, given that the transaction facilitated by investment puts money in the hands of someone who would not normally have access to it, thereby decreasing the poverty of the borrower. Furthermore, the premise of microfinance is that poor people can be responsible borrowers but the financial system does not normally provide instruments that are matched to their extremely modest means. If the premise is correct, then the poor will be able to use their loans to good account, gaining access to capital in order to create more capital, however modest the scale.

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