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Does microfinance have the ability to help the very poor?

Originally @ Stanford Progressive (offline)

For many of the 3 billion poor in the world, poverty does not just mean a limited access to financial resources; extreme poverty implies malnutrition and starvation, exposure to disease, an impediment to education, a reduction of rights and privileges, and possibly death. However, microlending can ease the extent of poverty. It is estimated that microlending organizations have helped over 67.6 million poor people. This level of success is what has excited so many to advocate microfinance as a means of reducing poverty: today, it is estimated that over 7,000 unique microfinance institutions exist. Even so, critics of microfinance are very vocal in their attacks on its efficacy and success. Globalisation Institute economist Tom Clougherty writes, “There are a number of criticisms leveled at microfinance and chief among them is that microfinance is just a ‘band-aid’, that it simply covers up the real problems without actually addressing them.”