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Poverty in third world (TW) countries is a serious problem, and microcredit has become the most popular approach to address this undesirable phenomenon. This model, perceived more than a quarter century ago in Bangladesh, is now being pursued around the globe. In spite of this enormous popularity, there is scepticism about the model's ability to make a “major dent in the TW poverty situation”. These criticisms, however, seem just as weak as the arguments supporting the model. One apparent reason is that both the claims and criticisms are founded on the same theoretical perspective of neoclassical economics. To inject some fresh ideas in the debate, this paper examined microcredit's poverty‐alleviating ability from the perspectives of moral and political philosophy and concludes that the theory has insurmountable limitations as a model of sustainable poverty alleviation in the TW.