`titrebGood debt? Bad debt?`/titrebIn India as elsewhere, microcredit has been celebrated as a powerful tool for the eradication of poverty and informal debt, and for the promotion of popular capitalism and women’s empowerment. Several years of fieldwork in rural southern India (Tamil Nadu) show that microcredit mainly has the effect of reinforcing a patronage democracy. Debt, whatever its form, remains a powerful force for the impoverishment of the labouring poor, while shaping individual and collective identities and contributing to social differentiation.