One common referent here is profit: the price is too high if there are any profits, or at least if there are excessive profits, however defined. But defining the just price for credit is essentially impossible. In the face of the manifest impracticality of that rule, the Roman church eventually shifted to the notion of just price. Many religious traditions contain injunctions against charging any interest.

Or at least I try to tackle it: for millennia, philosophers have debated how to judge when a loan’s terms are exploitative, and I fail to end the debate. I split chapter 7, the one on development as freedom, into two parts: theory and evidence. If development is freedom, then the question of the impact of microfinance becomes: when does microfinance enhance freedom and when does it restrict it? This question frames many themes: the potential for credit to be exploitative (usury) the transparency, reliability, and flexibility of financial services the empowerment of women and how group-based joint liability translates into peer support and peer pressure. In conducting the review of the impacts of microfinance that is the core of my book, I found Amartya Sen’s conception of development to be one useful frame for organizing my thinking. Many things bestow such freedom: income, education, equal rights, the right to vote. Sen’s “freedom” is not the freedom of libertarians-not merely freedom from interference-but increased agency in one’s life, increased control over one’s circumstances. The word “development” has many meanings-even within the “development community.” For Amartya Sen, the Nobel-winning economist and philosopher, development is freedom.

Amartya sen development