Microloans, Seen as Salvation for Poor Women, Trap Many in Debt

Source: The New York Times

RUSSEIFA, Jordan — Five years ago, Amira Hawamdeh took out a loan for $423 to buy buttons and yarn to make purses and sweaters, and winter blankets to sell to her neighbors.

Microloans like the one she used to build a small home business have been hailed as an innovative way to lift women out of poverty, empowering them to become entrepreneurs and contribute to the economy.

But three years ago, she stopped working after she developed diabetes and back pain. When her son got sick, she took out another microloan to pay for his medicine. When her husband could not pay the rent, she took out another loan.

“I was desperate,” said Ms. Hawamdeh, a 64-year-old mother of seven. Today, she is $613 in debt and fears going to jail.