In a study conducted between two villages in Karnataka, India, it was found that people who took out microfinance loans were people with lower incomes than those who didn’t take the loans. This is a widespread phenomenon, because the only way microfinance can work, is to ensure that profits from the loan deployment exceed the interest charged on the loan, and this is not usually the case for financially uneducated rural people, who end up buying consumables rather than spend the money on livelihood generating activities. This is a side of microfinance that is usually kept under wraps, according to this post. Read more here.