There has been a growing awareness among microfinance institutions that credit is certainly not transformative. Although certain people will be able to use microfinance to alter their future and build their businesses, that is not the case with the majority who receive a loan. Most are going to use it to smooth out their consumption.
The hard truism is that microfinance has been saddled with misplaced expectations, and we have lost a sense of its more modest, even though critical, potential. It is actually a tool in a broader development toolbox, but in certain conditions, it happens to be the most powerful tool. It will make the poor a little more resilient, but it is not the answer on its own.
