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Confessions of a Microfinance Heretic: How Microlending Lost Its Way and Betrayed the Poor

3.99  ·  Rating details ·  142 ratings  ·  21 reviews
Very little solid evidence exists that microloans make a dent in long-term poverty. Sadly, evidence does exist for negligence, corruption, and methods that border on extortion. Part exposé, part memoir, and part financial detective story, this is the account of a one-time true believer whose decade in the industry turned him into a heretic.

Hugh Sinclair worked with several
Hardcover, 264 pages
Published July 9th 2012 by Berrett-Koehler Publishers
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Start your review of Confessions of a Microfinance Heretic: How Microlending Lost Its Way and Betrayed the Poor
Dec 15, 2012 rated it liked it
Recommends it for: Anyone
This book, “Confessions of a Microfinance Heretic” offers a look into the actual workings of the Microfinance community. It’s not a comprehensive investigation into every player or even every country. Instead, it is a personal view of the problems that afflict the sector.

The author has worked in the industry for about a decade. He spent some time working for “normal” corporate finance, but then went on to get a Masters in Finance and later an MBA. So, he has a firm grasp of economics and financi
Mal Warwick
Aug 20, 2012 rated it it was amazing
Shelves: nonfiction
The Sorry Record of Microcredit Laid Bare by an Industry Veteran

“Some microfinance is extremely beneficial to the poor, but it is not the miracle cure that its publicists would have you believe. Microfinance has been hijacked by profiteers, and we need to reclaim it for the poor. The problem is not with a few rogue operators, alas, but with systemic flaws that permeate the sector.”

Thus does Hugh Sinclair lay out the thesis he pursues in Confessions of a Microfinance Heretic. If you skip over th
Marsha Altman
Feb 17, 2018 rated it really liked it
I'll say straight up that I'm no economist, and I don't understand much about banking or lending or how non-profits are supposed to work, so I had a little trouble with the nitty-gritty of the book, but I kept reading because it was otherwise fantastic. Basically, microlending is a thing where charities give incredibly poor people micro-loans (say, $100) to start their own businesses, and this is supposed to lift people out of poverty. In reality, since there's almost no regulation and the poor ...more
Edwin Setiadi
May 08, 2016 rated it it was amazing
Hugh Sinclair is a former quant trader in London, a heterodox economist, and he once driven a motorcycle from the tip of Alaska down to the edge of Argentina and landed in the Guinness Book of Records. An interesting guy. When he switched to microfinance (first in Mexico, then Mozambique, then 51 other countries) he experienced, saw first hand, and questioned the greed, corruption, manipulation and all the dark side of the industry, which made him ended up in a Dutch court battle, and eventually ...more
Rusty Tobin
Sep 24, 2012 rated it really liked it
The book answered many of the questions I had regarding the efficacy of micro finance. His goal of critiquing micro finance for the general population was partially achieved although his focus is on the ins and outs of the financial profit making that many institutions have turned to and this made for rather dry reading.
Apr 04, 2013 rated it really liked it
A very interesting and eye opening book for those interested in the topic.

The chapter on Mozambique was awesome, it could be a movie script
Ebonique Ellis
Jun 13, 2017 rated it really liked it
All the other micro finance books seemed like lies after reading this book.
Sep 02, 2020 rated it really liked it
A very well written book which generally revolves around the subject of micro finance. Micro finance is subject which was projected as something which would diminish poverty and it will be a thing of past. It was further championed by Mohammed Yunus who can be considered as the ambassador of Microfinance.

One rule of microfinance industry is it can never be criticised which was broken again and again by author.
Overall author gives us a great insight into working of microfinance sector which is sh
Charles Eliot
Aug 13, 2017 rated it really liked it
Microfinance is an idea with much promise, but in practice it's often just another form of loan-sharking. Worse, the idea of microfinance is held in such reverence that it's hard to get people on the inside to address the systemic corruption, profiteering, and incompetence that could sink the entire enterprise.

This, in a nutshell, is Hugh Sinclair's thesis. His might be an extremely jaded voice, but it's an important voice to hear.
Wochner Mike
Jan 02, 2021 rated it it was amazing
Given the personal history of the author in the industry, I found it fair account and a great revelation that not all that glitters is gold. Was an eye opener to me back then.
Feb 16, 2017 rated it really liked it
Author worked in Microfinance for over a decade and is an expert on inner workings of the sector. According to him, when you are charging around 30% to 150% interest rates on micro-loans, it is very hard for the borrower to generate a return that leaves something after paying the interest and the loan installment. There may be rare cases where the Borrower has actually climbed out of poverty because of a microloan but that is an exception and surprisingly the same borrower and her story along wi ...more
Dec 04, 2013 rated it it was amazing
Enlightening account of the sordid state of Microfinance today. Once considered a panacea for global poverty, Microfinance quickly found its practice overtaken by greedy loan sharks who have exacerbated poverty conditions and left the poor more destitute than imaginable. The commercialization and ultimate hijacking of a fascinating development theory is disappointing to say the least. Sinclair's depiction of MFI's is humanizing and realistic, coupled with high levels of detail and in depth resea ...more
Jan 13, 2017 rated it it was amazing
This book was recommended to me by a potential boss in a job interview with an organization that does microfinance loans coupled with business training, and charges from 10-30% interest (so they say). Having been a shameless Kiva enthusiast in my undergraduate university days and a somewhat ashamed graduate student as the academic consensus coalesced around the dubious poverty alleviation claims, I found this book to be excellent in that it sheds light on various aspects of why microfinance isn' ...more
Joe Zhang
Feb 25, 2020 rated it really liked it  ·  review of another edition
A great book, a small pity.

I learned a few things:
(1) in many cases microfinance hurts the poor, and it does good only sometimes.
(2) the business model may be faulty in microfinance. I ran a for-profit microfinance firm to the ground. Personally I lost big, and wrote a book about it: “Inside China’s Shadow Banking”.
(3) the most effective way to reduce poverty is probably industrialisation. Fair governance of the economy.

Hugh did a poor job explaining why a flood of money into MFIs and thus co
Jan 26, 2015 rated it it was amazing
A counterpoint to the marketing machine that exists like a protective bubble around microfinance. I appreciated that the book was more personal than comprehensive based on experiences and observations of the author and that he ultimately still believes that microfinance is a good solution for some people. A healthy viewpoint shining a spotlight on the issues gave the impression that the goal of the book was to fix the system rather than condemn it, despite the harsh title.

An excellent prerequis
Jun 02, 2015 rated it really liked it
In 2009 I thought Kiva and microfinance was the answer for poverty. I was not alone. Fast forward to 2012, Hugh Sinclair, perhaps the one person in the world who could have written this book, blows the doors off that concept. I cannot put this book down. In addition to illuminating the dark recesses of microfinance, it's a pretty good exploration of how important swimming against the current can be. ...more
Jun 17, 2014 rated it liked it
Others seem to have liked this book more than I did. I did not care for the accusatory and defensive tone. The field must be changing quickly because even though it was published in 2012 it makes no mention of Kiva Zip which actually does make loans directly to borrowers. It seems to be working well for one of the small groups from the class we took at Christian Theological Seminary this spring called "Creating God's Economy". ...more
John R Naugle
Nov 15, 2016 marked it as to-read
Shelves: favorite
I saw Hugh Sinclair, the author, interviewed on CSPAN and he was very knowledgeable. His book sounds fascinating.
Christian Conti
Aug 10, 2012 rated it liked it
I registered a book at!
Nov 04, 2012 rated it really liked it
Very insightful.
Jul 20, 2012 marked it as to-read
I think I"m going to disagree with him, but it will be interesting none the less ...more
Noreen O'Connor
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James Ervin
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