Microfinance failures: The cracks in this system have been evident for years

Published July 19, 2026 5:45am ET



It is hard to think of a philanthropic trend that had more widespread support than “microfinance.” The idea, launched in 1976 by economist Muhammad Yunus, offered small loans to impoverished women in Bangladesh to start small businesses that were expected to generate income to repay the loans, plus below-market rates of interest.

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