Microfinance: a gap in the moral and political philosophy of poverty

This two year grant under the AHRC Research Networks Scheme is bringing in close to £48000 to the Centre. The Principal Investigator is Professor Tom Sorell.

What is Microfinancing?

Microfinancing is the practice of extending commercial credit on a small scale to those who have no assets to offer as collateral for a loan. People in this position do not come only from the poor of the developed world: they can be among the worst-off of the poorest countries on the planet.  For the poorest of the global poor, micro-financing typically take the form of a six-month loan for under US$250 to set up micro-enterprises, e.g. one-person vending businesses, or to expand going concerns, e.g. very small farms.

The gap

Although microfinancing is widely acknowledged  by development specialists to be an effective tool in reducing poverty among  the very poor who have access to it (Besley et al, Morduch), it has received little or no attention from analytic  moral and political philosophers who write about poverty within the framework of  a theory of global justice. Microfinancing institutions are not among those that result from either a domestic or a global social contract along Rawlsian lines, and the Rawlsian framework is dominant in a global justice literature founded by Pogge and Beitz.

The institutions that result from a Rawlsian social contract are liberal democratic legislative, judicial, and redistributive bodies at the national level, or else supranational or global counterparts of these.  Microfinancing institutions are often at one remove from legislative bodies, and from tax-gathering or redistribution agencies . They are not, or not typically, state actors, and influential promoters of microfinance do not want microfinancing to become a state function.  

Although the Sen-Nussbaum understanding of poverty in terms of capability is relevant to microfinancing, and although Sen has publicly praised such micro-finance providers as the Bangladeshi NGO, BRAC http://www.bbc.co.uk/radio4/titansofaid/pip/7vmv0/), there is no Sen-Nussbaum moral defence of microfinancing.

The Network

A Research Network is the natural medium in which  to connect philosophers interested in global justice issues with microfinancing practice and those aspects of it that strike economists as problematic.


To expose economists and development studies academics to liberal global justice theory and its departures from the utilitarian frameworks in which economists feel at home; to influence practice, since both NGO figures involved in poverty reduction and commercial practitioners in financial exclusion will be participants.  There will be five meetings of the network in 2009-2010. The final meeting of the network will also involve development agency civil servants. The network would be the first in the UK to combine normative ethics and economic and development policy. 

Key participants

Members from the University  of Birmingham are, in addition to Professor Tom Sorell (the PI): Dr A Cabrera, Lecturer in Political Theory, Political Science and International Studies Dept; Joakim Sandberg (Global Ethics); Dr  Michael Hubbard, Reader in Development Economics, International Development Dept., Dr Paul Jackson, Head of International Development Dept.,  Dr Christine Mallin, Professor of Corporate Governance; Dr Andrew Mullineux, Professor of Global Finance; Dr Victor Murinde, Professor of Development Finance; Dr Rudra Sensarma, Research Fellow in Finance; Dr Ajit Singh, Professor of Economics (joint Cambridge, Birmingham Business School)

Other UK academics:Dr Kimberley Brownlee (Lectuer, Dept. of Politics, University of Manchester); Dr Angus Dawson (Senior Lecturer,  Centre for Professional Ethics Keele University); Prof. Colin Kirkpatrick (Professor of Development Economics at the Institute for. Development Policy and Management, University of Manchester); Prof. Cecile Fabre (politics, Edinburgh); Prof. Leif Weinar ( Dept. of philosophy, University of Sheffield) Dr Zofia Stempowska (Lecturer, Dept. of Politics, Manchester);Dr. Stuart White (Jesus College, Oxford) 

UK NGO sector: Patrick Conaty, formerly New Economics Foundation; Rosalind Copisarow Street, UK; Ed Mayo, Consumer Council

UK Commercial sector: Charles Middleton, Managing Director, Triodos Bank; Steve Walker, Aston Reinvestment Trust

South Asian participants: Shabbir Chowdhury (Head of Microfinance, BRAC –Bangladesh NGO), Shubashish Gangopadhayay, India Development Foundation; Jayandev Madugla, Indian Institute of Mgt; nominee of Grameen Foundation (Bangladesh-based Grameen Bank pioneered microfinance)

USA:Michael Sherraden (Professor of Social Development, Washington University, St Louis); Jonathan Morduch, (Professor of Economics, New York University); Prof. David Crocker, (philosopher, University of Maryland).