Undoubtedly, financial technology (fintech) is driving greater financial inclusion. Innovations are giving people more access to financial services through mobile and computing services, the internet, and payment cards. One of these services is microcredit: small loans for individuals and informal businesses.
But a closer look at the microcredit channel of inclusion shows an emerging form of dispossession of the poor. Examples include the catastrophic collapse of microfinance in Andhra Pradesh, India, in 2010. Microfinance institutions were involved in reckless lending in the chase for abnormal profits. Over-indebted clients could no longer service their debt. Some even took their own lives due to debt recovery-related harassment and the shame of being unable to service debt in group-lending situations.
