We Are Not Able to Live in the Sky: The Seductive Promise of Microfinance

by Mara Kardas-Nelson

A deeply reported work of journalism that explores the promises and perils of microfinance, told through the eyes of international lenders and women borrowers in West Africa

In the mid-1970s, Muhammad Yunus, an American trained Bangladeshi economist, met a poor female stool maker who needed money to expand her business. In an act widely known as the beginning of microfinance, Yunus lent $27 to forty-two women, hoping small credit would help the women pull themselves out of poverty. Soon, Yunus’s Grameen Bank was born, and the idea of giving very small, high-interest loans to poor people took off. In 2006, Yunus and the Grameen Bank won the Nobel Peace Prize for “efforts to create economic and social development from below.”

But there’s a problem with this story. There are mounting concerns that these small loans are as likely to bury poor people in debt as they are to pull them from poverty, with borrowers from India to Kenya facing consequences such as jail time and forced land sales. Reportedly hundreds have even committed suicide.

What happened? Did microfinance take a wrong turn, or was it flawed from the beginning?

Mara Kardas-Nelson’s We Are Not Able to Live in the Sky is about unintended consequences, blind optimism, and the decades-long ramifications of seemingly small policy choices. The book is rooted in the stories of women borrowers in Sierra Leone, West Africa. Their narratives, woven through a deep history of modern international development, are set against the rise of Yunus’s vision that tiny loans would “put poverty in museums.” Kardas-Nelson asks: What is missed with a single, financially focused solution to global inequity that ignores the real drivers of poverty? Who stands to benefit and, more important, who gets left behind?

Genres: Nonfiction, Economics, Africa, Science, Business, Politics, Social

400 pages, Hardcover

First published June 11, 2024

Reviews

[Rachel B · Rating 3 out of 5]

The author exposes the inner workings of microcredit in poor countries, especially Sierra Leone.

I knew only a small amount about the topic before this book - I was definitely not aware that people were paying such high interest rates (in fact, I assumed these loans were low- or no-interest); they're frequently quoted as being over 100%, with at least one effective rate, after all is said and done, over 400%.

And then a study shows that many of these borrowers are poorer after taking out the loans than they were before. Is anyone really surprised?

The book itself felt somewhat disjointed and repetitive. The author includes narrative portions, profiling the lives of 3 different women in Sierra Leone whose lives have been affected by microloans, and I couldn't keep their stories straight, because the book kept bouncing between all of them.

I'm glad I read it, but I think this could have been a long article instead - at the very least, a much shorter book.

There was some brief, mild profanity, and God's name was misused at least once.

I received access to this ebook from the publisher via NetGalley.

[Andy]

DNF. Jumbled journalistic anecdotal style that I find irritating for trying to get at coherent conclusion.

[Tracy Dorsett · Rating 4 out of 5]

Thank you Henry Holt for an ARC of We Are Not Able to Live in the Sky. I entered the drawing for the book because I enjoy reading about different cultures and I am interested in social justice. My interest in finance is perhaps less than the average person (been putting off meeting with a financial advisor for ages,) so I might not be the intended audience.

In any case, I did learn quite a bit about micro finance although the history was a bit of work to get through at times. Still I’m glad I stuck with it. It’s such an enticing thought that we can make a profound impact on someone’s life by giving them a small loan. The consequences of this approach of helping those mired in poverty has profound and lasting complications it turns out and many of the unintended or unthought of consequences are negative - public shaming for the inability to pay a loan back, incarceration, and suicides. Many of those in poverty were simply hoping to buy basic services with their loans such as education, health care, clean drinking water, etc. The book gives one food for thought on how to really help others and I found the personal stories interesting.

[Natalie Park · Rating 4 out of 5]

Thank you to Net Galley and Henry Holt & Company for the ARC in exchange for my honest review. This was an interesting review of the history of microfinance and the pros and cons of how this has impacted people's lives and countries. Based on the deep research provided in this book, the result seem mixed and there have many that have taken advantage of this to make lots of money...which was so not the point. It seems that microfinance started out with good intentions but it has become a many-headed monster that has impacted poor people's lives for the worse. In the 2010s I worked for a company that was very supportive or Grameen and Kiva and I wonder what we really contributed to in the long run. The book was very long but definitely had alot of good information to ponder and consider.

[Asher Levinthal · Rating 5 out of 5]

Fantastic insightful book. Can’t recommend more!

[Ngozi Cole · Rating 5 out of 5]

I really loved this book, especially as a former development professional. I'm familiar with the negative consequences of well-intentioned programs and ideas in global dev, and I had no idea women were paying such high interest rates and getting caught in cycle of unfinished debt. It's truly a "seductive promise" for people living in emerging economies earning usually less than a dollar a day and have huge responsibilities.

I hope this book will encourage development professionals and economists to think more deeply about the impact of development "solutions" and be more willing to properly scrutinize and assess well-intentioned ideas.

I also like that the book was well-researched and there was a balance of different voices. I like how the lives of the three women in Sierra Leone were highlighted to illustrate the book's argument.

[Pam Mooney · Rating 5 out of 5]

So interesting! I enjoyed the research and appreciated the balance in sharing the information. It is a good read even if you don't have a background in microfinance - the information is there to inform and educate. From a lay person perspective - there are a lot of points to ponder.

[Hazel P · Rating 5 out of 5]

✍️ I didn't know much about the role microcredit plays in international aid before reading this book, and I see the potential of the book being adapted into a documentary. The author uses meticulous analysis that reveals microcredit's developmental history and its troubling present-day reality, challenging the idea that either small loans or financial inclusion is a panacea for global poverty.

The book's first half traces microcredit's emergence and popularization, debunking the notion that it was a novel Western invention. As the author demonstrates, similar frameworks for savings and lending had long existed within local communities worldwide before being co-opted by America-centric organizations and promoted by Muhammad Yunus. The conventional narrative presents microcredit as an opportunity for the poorest, especially women, to launch small businesses, but the reality proves far different. These loans, often too small to support genuine entrepreneurship, primarily serve as stopgap measures for basic consumption needs, including food and children's education.

Despite the author's subtle skepticism in these early chapters, I found myself initially sympathetic to the idea that microcredit could economically empower women with entrepreneurial ambitions. However, the book's second half revealed the structural issues that microcredit cannot fix and the exploitative nature of the industry's further development.

The author's investigation into international funders' practices reveals shocking exploitation, with annual effective interest rates sometimes reaching 300% – all while being marketed under the guise of "doing good." The industry has become a profit-making machine that is seen as a safe investment, isolated from global trends in the financial market ("since the poor need to borrow no matter what"). Through intimate portraits of borrowers in Sierra Leone, the book exposes the structural and infrastructural issues that prevent microcredit from functioning as an anti-poverty solution. Rather than funding business ventures, loans typically cover essential services like healthcare and education. In the absence of proper legal regulation and enforcement mechanisms, microfinance lenders operate with impunity, setting predatory interest rates. The region's corruption and dysfunctional justice system hinders citizens' ability to build sustainable savings, and it's not rare for citizens to be forced to take on massive debt to avoid imprisonment, even when the original outstanding loan amount is as small as $12.

The author's critique extends beyond individual cases to examine systemic failures. The microfinance sector lacks transparent impact measurements, focusing almost exclusively on capital injection while ignoring actual outcomes. Even the methodology of randomized controlled trials (RCT), often used recently to validate microfinance programs, faces thoughtful criticism; for example, it may neglect the specifics of a particular context. The author asks: Is RCT truly the gold standard, or just the tool that has become the most popular? (page 323).

For me, the most valuable takeaway is the author's broader lesson about critically examining how narratives are manufactured by political, economic, and historical forces. This book serves as both an exposé of the disillusionment behind microcredit's promising facade and a reminder to question accepted notions about international development solutions, financial inclusion, and impact investing.

🔖
p327 If I've learned anything in writing these pages, it's that distilling deeply complicated problems into bite-size solutions is a great way to make a big mess, often without meaning to.

p305 The bigger issue is structural. Food and other goods are getting more expensive. ...While many financial inclusion advocates suggest that bank accounts and debit cards are a way for poor people to pay for life's necessities, few advocate for those necessities to be cheaper.

[Kathy Piselli · Rating 4 out of 5]

I finished this book just as Muhammad Yunus was being asked to put Bangladesh back on its feet after the ouster of its longtime prime minister Sheikh Hasina. There is some good history here about Bangladesh and I learned a lot I didn't know about the microfinance concept he championed decades ago. The other stories are a walk through what poverty means in several countries. It seems (to paraphrase parts of the book) "very small loans" became "financial services, "women" were replaced by "entrepreneurs", who were replaced in turn by "unbanked", a "significant untapped customer base" - I've heard all these terms bandied about right here in Atlanta. The conservatism of banking became "mobile loans" extended to literally anyone, so much so that by the end of the book the author wonders if it isn't better just to hand people money without strings attached. As far as helping small business, she notes that "financial inclusion" hasn't really helped people; those who survived stressors like the pandemic did so without the help of financial services - in part because those services are not free. My favorite line of her summing-up: "distilling deeply complicated problems into bite-size solutions is a great way to make a big mess, often without meaning to". Kardas-Nelson wrote a cleareyed, well-sourced account of how the other half lives and how those of us more fortunate can help or hinder their path.

[Jennifer · Rating 3 out of 5]

Microloans are supposed to support individuals and strengthen communities. But as we learn in this book, microfinance can do more harm than good. Microloans can bury poor people in debt, allow borrowers to face jail time and forced land sales, and has led to hundreds of sui*ides. And this financial option doesn't solve long-term problems like government crime, education, access to clean water, or family planning efforts. Likewise, "the campaign (in many cases) did not track whether poverty was reduced, or women empowered. It didn’t even track the details of the loans. Lenders did not have to report the interest rates they charged, whether they offered trainings to their borrowers, or the outcome of their borrowers’ businesses or overall welfare." As the book blurb states, this book addresses questions like, "What is missed with a single, financially-focused solution to global inequity that ignores the real drivers of poverty? Who stands to benefit and, more important, who gets left behind?"
I have always suspected that microfinance could be harmful as well as helpful. This book helps me understand the benefits and challenges. All the history was enlightening, but also a bit boring and redundant.
I also appreciated the personalized stories that gave a human face to the industry. However, every chapter tells a different story - either about a woman who's affected by microloans or details about the microfinance industry. The abrupt shifts disrupt the book's flow.

[Yofish · Rating 4 out of 5]

Basically a history of the microfinance movement. It’s kinda sad. It moved from “Here’s a great idea to help alleviate poverty” to “We can’t really find evidence that it works” to “Another way rich people make money off poor people while thinking (or pretending) they’re do-gooders.” And at the end, the author says that most of the poor people she’s talked to (mostly in Sierra Leone) now need the microlenders because theyre now such a part of the economy that nobody knows how to get money without these loans. Sigh.

I didn’t love the writing here. Most of it is very newspaper-journalism-ish, which doesn’t work (for me) in a full-length book. She interrupts her history each chapter to focus in on local stories of poor Sierra Leone women living off these microloans. I totally understand why she did this---it’s good to have a human face to illustrate what’s going on on the ground. But. She’s following the same 5–10 women in these stories, and after reading the general history for 20 pages, I had trouble remember who was who.

It’s a little ironic that the microloans were originally created to “save” poor folks from what are essentially loan sharks, But then the microlenders turn into loan sharks---charging ridiculously high rates (in order to make it sustainable; and then profitable), and using local police to arrest those who don’t pay. Sometimes they “just” shame those who don’t pay, and whaddaya know, suicides happen.

[CM · Rating 5 out of 5]

This beautifully written, deeply researched, compelling book should be required reading for anyone contemplating a career in global health, public health, or government . It is a case study about what happens when magical thinking takes over and a simple solution (without supporting evidence) is promoted to a complex problem—in this case global poverty. The theory was that the poorest of the poor after being provided with small loans (under $100 in many cases) accompanied by predatory interest rates (over 100%in many cases) would be able to repay the loans and develop profitable businesses. This movement was originally called Microfinance and its astronomical growth was spurred by ambition and money. Careers and fortunes were made at the expense of the lives and the well being of the poor.
Aside from the history of the Microfinance movement and its promoters, Kardis-Nelson provides background about how the U.S. became a player in international development work. Finally she tells the stories of real life women whose lives were impacted by Microfinance. It is a fascinating, thought disturbing read about how well meaning people created an international payday loan system which became profitable for the industrialized world at the expense of an international impoverished population.

[Meg Holmberg · Rating 5 out of 5]

Back in the1990’s, as a soft-hearted social worker with little knowledge of economics, I was captured by Mohammed Yunus' promise of micro-loans as a simple, direct, respectful means of alleviating poverty independent of large-scale government-funded programs so often beset by inefficient bureaucracies. In subsequent decades, I lost track of what had happened to this innovative concept — until recently, when my daughter introduced me to Mara Kardas-Nelson’s book, We Are Not Able to Live in the Sky.

A deeply-researched account of the evolution of micro-loans, this book has opened my eyes to how a seemingly well-intended humanitarian concept can be gradually captured by capitalism, drifting to become, in its worst form, an exploitative, life-destroying practice. The author’s meticulous history is illuminated by first-hand stories from women in Sierra Leone detailing how their day-to-day lives have been impacted by these loans.

We Are Not Able to Live in the Sky offers a powerful lesson in good intentions gone awry. I have to agree with journalist Laurie Garrett that it "should be mandatory reading for everybody looking for solutions to extreme poverty.”

[Aastha Panghal · Rating 5 out of 5]

*Title:* We Are Not Able to Live in the Sky: The Sedu(gu)ctive Promise of Microfinance
*Rating:* 4/5
*Theme:* Economic Development, Poverty Alleviation, Social Justice

This book offers a nuanced and thought-provoking critique of microfinance, challenging the notion that small loans can be a silver bullet for poverty alleviation. The author's insightful analysis reveals the complexities and limitations of microfinance, highlighting the need for more comprehensive solutions that address the root causes of poverty.

The writing is engaging, and the use of real-life examples adds depth and context to the arguments. The theme of economic development and social justice is woven throughout the book, making it a compelling read for anyone interested in understanding the intricacies of poverty alleviation.

The author's exploration of the seductive promise of microfinance is particularly striking, revealing how well-intentioned initiatives can sometimes perpetuate the status quo. Overall, this book is a valuable contribution to the discussion on poverty alleviation and economic development, and I highly recommend it to anyone looking for a nuanced understanding of these complex issues.

[Michelle · Rating 3 out of 5]

Thanks to NetGalley and the publisher for the arc of this book.
This is a tough one. I want to like this. A lot of research went into this book, and we need to know what happened here--how microcredit became microfinancing became loansharking . . .
But this was a rough read. My husband mentioned it sounded more like dissertation, and in a way that's true. It read like a jam-packed, abundantly endnoted dissertation with a few short personal stories crammed in for human interest, or to make it more "mainstream" attractive. But the chapters, although containing so much information, and so many notes, were dense reading. I feel the story could have been streamlined and focused and the personal stories more integrated and specifically linked to the narrative of the story of microcredit. Instead it felt disjointed and only tangentially related.
I do applaud the detailed research and the dedication to telling this important story. I just fear it will be difficult for mainstream readers.

[Andrea · Rating 5 out of 5]

Thank you to NetGalley and the publisher for an ARC.

Many years ago, I remember hearing that microfinance was going to end poverty and transform the world. That didn’t seem to happen, and I haven’t heard about microfinance in years.In Kardas-Nelson’s thoughtful book, we see how idealism and Western capitalism together contributed to the enshittification of microfinance (though that implies it started off as not shitty, which may be worth debate). It’s a compelling story told in alternating chapters between the history of microlending and the story of several borrowers living in Sierra Leone. The book paints quite a picture of our propensity for single solutions that support our world view and the damage of unintended consequences. Genuinely a pretty cutting and fair critique of development work, specifically how research and numbers can be shaped to tell any story. This one will stick with me for a long time.

[John Bange · Rating 5 out of 5]

I thought this was a very thought provoking, fast-paced and comprehensive history of the problems brought about by the microfinance industry. It's a nuanced take that at once gives everyone involved in the creation of theh idea the benefit of the doubt, while also seriously engaging with the poverty, inequality and other social problems it has brought about. I particularly liked the sections on the Sierra Leonean women which show how central microfinance (and its challenges) are now to ordinary, impoverished women's lives. At the end of the day, these pro-market approaches just get repackaged again and again (now as financial inclusion) as the wealthy benefit and delude themselves that while they are making money they helping people too, when, in fact, they have managed to make money off the poor and marginalized.

[AndiReads · Rating 5 out of 5]

Extensively reported, this is everything you ever needed to know about Micro financing and the dangers it has brought to developing countries under the guise of help. Kardas-Nelson presents the history of the concept from the 70's when peace prize winning Muhammad Yunus American-trained Bangladeshi economist, created the programming based on the concept of small loans. Small loans can create large debt however and Mara Kardas Nelson illustrates these facts with a series of stories of women based in Sierra Leone, West Africa. This is a non fiction story that reads like a thriller and has completely changed my thinking. Please give it a read!
#henryholt #wearenotabletoliveinthesky #microfinance #marakardasnelson

[Helen Cho · Rating 4 out of 5]

Not the easiest read at the beginning but perhaps I was just distracted. A bit puzzled by the switching back and forth of the time so that the book was not chronological. But I nit pick.

A necessary book about the story of microfinance--its ridiculous promises (it will rid the world of poverty); its insane applications onto the poorest of the poor of the world; all the excesses of the evils of greed; a microcosm of all the ways that we, the West, the enlightened, the best, mess up the world royally all the while professing our wonderful intentions.

And Muhammad Yunus, the "inventor" of microcredit who proclaimed that this simple concept applied over the world would lead to poverty museums. This same wishful thinking led to Elizabeth Holmes and the wholesale hoodwinking of the scientific community. She was a genius in her early twenties, someone who'd developed a technology that made what was thought difficult simple. There was a lot of money, as usual. And Muhammad Yunus won the Nobel Peace Prize.

It's like marketing, the only thing US leads the world in right now, has won over everything tangible. Who the heck believes in gravity when you can make Wendy fly?

Any chance we could leave the rest of the world alone and stop trying to fix it? We cause so much harm.

[MH · Rating 4 out of 5]

A clear history of microfinance, intercut with the stories of a group of impoverished women in Sierra Leone whose relationship with loans and credit is sad and complicated. This charitable concept of small loans to impoverished women was at one time massively popular, promoted by both the Clintons and the Bushes and even winning its 'creator' a Nobel Prize. But as more financial institutions got involved, more arguments (both logistical and philosophical) erupted within well-meaning but blinkered NGOs, and more poor people found themselves buried in debt while for-profit lenders made a mint, it's now seen with a much more critical eye, and Kardas-Nelson does a fine job walking the reader through a complicated economic history - and an even better job writing about the Sierra Leonean women who have taken out small loans and, rather than discovering the promised empowerment and economic freedom, find themselves resigned to a seemingly inescapable economic trap.

I was lucky enough to win a copy of this book through a Goodreads giveaway.

[Orla Adams · Rating 5 out of 5]

With impressive skill, Kardas-Nelson weaves together stories of female borrowers in Sierra Leone with high-level analysis of microfinance and its discontents.
She distills complex economic concepts and international development practices into a thoroughly enjoyable read.
Her journalistic stylings kept me engrossed in the lives of the Sierra Leonean women.
Expertly researched and captivatingly written, this book should be required reading for anyone interested in international development or global affairs.

[Annemarie · Rating 3 out of 5]

An important topic. It never ceases to amaze me how rich people can make money by exploiting poor people. The book was very well researched, but it was almost too detailed, repetitive and disjointed and that was a real let down. If this could be re-written more sharply and succintly I think it would be groundbreaking.

[Rafe Mazer · Rating 5 out of 5]

A fun mix of historical review of microfinance and personal accounts of experiences of microfinance clients. This book raises challenging questions about microfinance and its sometimes awkward balance of business focus and social mission. Definitely worth reading if you work in this field or have ever given to a microfinance organization.

[Susan Csoke · Rating 5 out of 5]

The promises and perils of micro finance told by international lenders and women borrowers in West Africa. Very small loans with high interest to poor people took off, but concerns over these loans burying poor people into further debt rather than pull them from poverty was substantial. Many have even committed suicide. Blind Optimism. Tragic. Thankyou Goodreads for this free book.

[MB · Rating 3 out of 5]

Thank you to a Goodreads giveaway and opportunity for me to provide my honest review. While this is normally not a type of book I’d read, I did enjoy its contents. So much time and resources went into the book! I enjoyed the sections of the book most that detailed the womens lives and their own experiences with various methods of loans taken out.

[Laurie · Rating 3 out of 5]

Fascinating look into the origins and inner workings of microfinance. The author mixes facts and statistics with real-life examples that the reader follows throughout the book. The details behind the scenes of microfinance lenders is eye-opening and thought-provoking, raising a lot of questions about whether these loans are truly improving the lives of the people they are meant to help.

Thanks, NetGalley, for the ARC.

[Brandon Pomeroy · Rating 4 out of 5]

Interesting and comprehensive look at micro finance. Historical and practical. The anecdotes ring true to my experience in Mali and Uganda in that there is not a quick external fix to poverty. The mechanisms that cause it are the same ones that perpetuate it generation after generation.

[Katharine Wenger · Rating 3 out of 5]

There was a lot of information. I had no understanding of this topic when I began the book. I feel like I learned a lot though it took me a while to finish. It is not my normal subject matter to read about.

[Karen · Rating 4 out of 5]

Eye opening read - microfinance is not the save the world solution it was thought to be. Factual narrative interspersed with real stories of women who had microloans and how it impacted their lives. I learned a lot.

[Hamdan Aziza · Rating 4 out of 5]

Thanks for this book