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Lesson 2

What's wrong with government credit schemes?

Picture of Povertia

In this lesson you will find yourself in Povertia, a poor country with a large rural population. There have been many development schemes and programmes over the years but the people remain very poor.

Now there is a new Minister of Rural Development and, once again, he proposes to tackle the problem of poverty reduction. As you read a copy of the Minister’s speech you will be joined by Alfred who asks you what the Minister has said and what you think of his proposals.

Picture of Alfred

In this way you will be able to reflect on the ways that governments often decide to intervene in financial markets and the disadvantages that come with these strategies. Politicians still like these approaches but a new paradigm has evolved which is thought to have greater credibility and now dominates the microfinance sector. Find out more as you work through this lesson.

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