Capitalism, Microfinance and Democracy

The paper looks at the relationship between neoliberal thought of economics and microfinance. Applying the principles of embedded neoliberal economics to microfinance suggests that the government and markets do not exist in solidarity. They can both grow and sink together. Both are required to fulfill each other's requirements to sustain in a nation state. This paper suggests that market oriented economy, can be mediated through the government by bringing in changes to the institutions that can help markets grow and by also molding the nature of relationship it shares with the society. On the other hand, Markets have to incorporate the cultural, social and local knowledge to use it to their advantage. Economic sphere cannot work on its own regulations and by itself completely. The aim of neoliberal proponents shall not be to create same homogeneous conditions wherever they go to operate. Rather diversity should be studied closely to devise the best methods to deal with different contexts and societies. The paper first analyses the relationship between different types of capitals (Physical and Social) with Microfinance and development and then knits them together with the thread of democracy.