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In their
paper The Economic Lives of the Poor Banerjee and Duflo, outline reasons as to
why increasing the availability of credit to the poor households in districts
such as Udaipur would help the poor in solving many day to day problems they
face and enhance their standards of living.

The paper
also mentions the importance of entrepreneurship that exists within the poor
community. The major obstacle that stood for the poor to carry on successful
entrepreneurial ventures or ideas was the high cost of credit and lack of
reliable ways to save money and accumulate capital. This lack of credit can thus
help us explain why as the writer mentions that the business that were owned by
the poor were too small to operate efficiently and effectively. It seems quite
clear after reading the paper that the availability of microfinance and an
effective system of credit availability to the poor would solve a number of
problems faced by the poor and increase their economic productivity. However
Banerjee and Duflo raise a very surprising point that “making money is not a
huge priority” for the poor and they sense “a reluctance of poor people to
commit themselves psychologically to a project of making more money”.

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With recent
success of many entrepreneurial ventures by women in rural parts of the world
one can raise the point whether Banerjee and Duflo ignored women/gender when
they make their statements that the poor are unwilling to make the effort of
making more money. The writers mentioned two different examples which support
their idea of poor not making a genuine effort to make more money firstly the reluctance
of farmers to buy fertilizers and secondly the reluctance of the poor to
migrate for longer periods of time to earn higher wages. Both the cases
mentioned seem to raise the issue of biasness, in both circumstances men are
the ones who would tend to migrate to other places and they would be the ones
who are reluctant in buying the fertilizers. The point I want to raise here is
that with almost 37 percent of enterprise globally are run by women and If
these poor women in different villages are given opportunities in the form of
credit and education they can totally change the perception of the writers as these
women would be willing to go an extra mile to increase their income not only to
support themselves but also their loved ones. 

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