A Forgotten Legacy of Gulliver’s Travels

Before he sent Lemuel Gulliver to the land of giant humans and tiny politicians, Jonathan Swift was doing something far stranger for an 18th-century literary celebrity: he was running an informal bank out of his own pocket for Dublin’s poorest tradespeople.

Today, microfinance is caught in an endless tug-of-war. Critics dismiss it as a hyped-up developmental myth, while champions revere it as an indispensable pathway out of poverty. Working in development, I see it for what it truly is: neither a miracle cure nor a complete failure, but an imperfect, powerful tool for people whom traditional banks ignore.

Yet whenever we debate financial inclusion, we treat it as a distinctly modern invention. We assume the idea of lending tiny sums without traditional collateral belongs entirely to 20th-century development economists. In reality, the blueprint was drawn over 250 years ago by a man far better known for his biting satire than his financial acumen.

While reading David Roodman’s Due Diligence a while back, I came across this forgotten chapter of Swift’s life. Long before he wrote Gulliver’s Travels or his shocking economic satire A Modest Proposal, Swift was walking the streets of Dublin, watching cobblers, weavers and tailors get crushed by poverty under British rule. Traditional banks wouldn't glance their way because they had no physical assets to offer as security.

So, in the early 1720s, Swift set aside £500 of his own money to test an experiment. He offered small loans, typically £5 to £10, to help industrious tradespeople buy raw materials or basic tools. Because his borrowers lacked property, Swift replaced physical collateral with human trust: borrowers simply needed two neighbours to vouch for their character. To keep the debt manageable, he instituted small, weekly repayments.

It worked. Repayment rates were remarkably high. Long before modern social collateral frameworks were formalized, Swift proved that poor borrowers were deeply creditworthy when access to capital was rooted in local accountability and community trust.

Swift’s writing and his loan fund sprang from the very same source: a sharp intolerance for systemic injustice paired with a quiet empathy for working people. While Gulliver’s Travels mocked the arrogance of ruling elites, his modest loan fund gave ordinary people a fighting chance at self-reliance. He wasn't just railing against a broken system; he was reaching into his own pocket to build a functional alternative.

When Swift died in 1745, his initiative didn't die with him. Other groups in Ireland replicated the model, leading to the Charitable Loan Societies Act of 1823. By the 1840s, these Irish loan funds were serving more than one-fifth of all households in the country, forming one of the largest small-scale credit networks in 19th-century Europe.

Swift once famously wrote in a letter to a friend, “A wise man ought to have money in his head, but not in his heart.”

Centuries later, as microfinance has expanded into a multi-billion-dollar global industry, sometimes losing its soul to commercial interests, Swift’s words feel less like an old maxim and more like an urgent reminder. True financial inclusion requires both: a sharp mind to design a system that works and a warm heart that never forgets who the system was built for in the first place.

Sayma Sultana is a development professional