Micro-credit programs offer credit without demanding land or property as collateral, thus targeting clients neglected by the formal banking sector. Major international development organizations and donors presently regard them as an effective instrument in development work, particularly in poverty alleviation, women’s empowerment and employment creation. Based on research carried out on two Ugandan organizations, this paper argues that the social impact of micro-credit programs lags behind the expectations raised. Problematic aspects discussed include increasing work loads for women, exclusion of the poorest, and the unsatisfactory working and living conditions of many micro-entrepreneurs and their workers.
