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The crux for me is that western economists refuse to see the woman with a cow as a business. So she doesn't represent measurable economic development. Doesn't contribute to the export economy. Doesn't boost high tech competitiveness.
In fact, the woman is an entrepreneur, a small dairy business owner. Her success or failure depends on her smarts and her hard work just like a business anywhere. Contrast this to the traditional vision of economic development, which would probably look something like a local factory owner expanding and hiring more wage laborers at 50 cents an hour. Those workers have little chance to improve their lives, even if they work hard, and they have jobs as long as they make the factory owner more money. This is viewed as measurable, laudable economic development.
And what's this nonsense about peer pressure? Somehow the existence of some village peer pressure to repay a loan, so that more villagers can participate, creates a higher "burden of evidence" that lives are improved. Huh? Are they suggesting a woman would rather escape peer pressure than have a new cow? That peer pressure is too onerous a condition of a loan? I'd like to see a local US businessman stand up and swear before the whole community that he will repay his business loan!
Does microcredit work for individual people? I think the impossible "global-end-of-poverty" style measures by which economists judge microcredit by are the problem.
This is simpler: Before loan: woman has no cow and no debt and no credit history. After loan is paid: woman has a cow and no debt and a clean credit history. She is a proud business owner! That is a success.
