If poverty were truly just credit constraint, the problem would self-correct: people facing 20-30% returns on investment would save, invest, and profit, and lenders would profit serving them — so the persistence of poverty is itself proof the binding constraint is not credit.

causalpending

Speaker

Michael Munger

Evidence Quote

so if it were as easy as providing credit somebody would do it and make profits in just the way that you suggest suggest and that's proof that it's not credit constraint

Source

Mike Munger on Microfinance, Savings, and Poverty 04/18/2011EconTalk
Created: 6/17/2026, 10:29:24 AM

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