Many religious traditions contain injunctions against charging any interest. Or at least I try to tackle it: for millennia, philosophers have debated how to judge when a loan’s terms are exploitative, and I fail to end the debate. I split chapter 7, the one on development as freedom, into two parts: theory and evidence.
If development is freedom, then the question of the impact of microfinance becomes: when does microfinance enhance freedom and when does it restrict it? This question frames many themes: the potential for credit to be exploitative (usury) the transparency, reliability, and flexibility of financial services the empowerment of women and how group-based joint liability translates into peer support and peer pressure. In conducting the review of the impacts of microfinance that is the core of my book, I found Amartya Sen’s conception of development to be one useful frame for organizing my thinking. Many things bestow such freedom: income, education, equal rights, the right to vote. Sen’s “freedom” is not the freedom of libertarians-not merely freedom from interference-but increased agency in one’s life, increased control over one’s circumstances.
The word “development” has many meanings-even within the “development community.” For Amartya Sen, the Nobel-winning economist and philosopher, development is freedom.
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