Beginning with the idea of microloans in the 1980s and then expanding to cover other sorts of financial services, “microfinance” was sold by global elites as a way to transform the economies of the Global South by allowing poorer communities easy access to banking and credit. “Fintech,” short for financial technology, is the latest evolution of this concept, which deploys digital platforms to offer financial services to the global poor.

But according to economist Milford Bateman, the promise of microfinance and fintech has been an illusion. Far from raising the living standards of the world’s poorest, fintech and microfinance schemes have often pushed people deeper into destitution, while making exorbitant profits for the Western investors behind those schemes. In an interview with Fabio de Masi for Jacobin, Bateman discusses why and how microfinance and fintech has failed to help the poor, as well as promising public sector experiments with these ideas in Brazil that remove the profit motive from the equation.

This interview is part of a series of publications that De Masi, a former member of the European Parliament and the German Bundestag, conducted for his research project on fintech in Africa and the future of money with the Rosa Luxemburg Foundation. De Masi became better known in Germany for his role in exposing the scandal around the German payment processing firm Wirecard and other corporate and tax-related scandals.