Research papers microfinance poverty

impact of microfinance on poverty reduction pdf

While many microfinance institutions offer services such as training, savings facilities, family planning, health services and education Karim and Osadainterest rates of micro-loans are usually higher than those of commercial loans, but they are far below the interest rates of informal money lenders Bayulgen ; Chowdhury and Chowdhury Following this approach some microfinance institutions, such as the Indian SKS Microfinance or the Mexican Compartamos, are already listed on stock exchanges in order to attract investors.

Because microfinance is often not regulated such that lending often happens informally and many potential borrowers are not aware of the benefits and risks of products and services offered by microfinance institutions and commercial banks.

best research articles on microfinance

Therefore, until to date, investments in microfinance have been mainly done because of philanthropically motives J. They are supported by Cull et al. It focuses on whether the microfinance institution is able to conduct the business without being supported by donor monies.

The impact of microfinance on poverty alleviation and economic growth

Microfinance service offers not only the microcredit but also the allied services such as consulting and training for the microenterprises as well as market information and access to wider market which is very often not in reach of micro-entrepreneurs due to their lack of knowledge and bureaucratic hurdles. Uneasy passages between neoliberalism and feminism: Social inclusion and financialization in Israel's empowerment microfinance This article focuses on feminist non-governmental organizations advocating for economic empowerment of women EEW through microfinance, using Israel as a case study. Those and similar institutions follow the financial sustainability approach Hermes and Lensink a ; Robinson K E Y W O R D S empowerment, feminism, financialization, microfinance, neoliberalism Tweet Feminism has neither simply co-opted by neoliberalism nor is women's microfinance MF a mere expansion of neoliberal financial rationalities. This study evaluates the impact of micro-finance services provided by MFIs on poverty alleviation. Generally, microloans are directed towards funding both existing and start-up enterprises Bayulgen The current study focuses on performance analysis of NGO-turned-microfinance institutions MFIs that offer not only the microcredit but also allied services to a wider clientele base. Since the s, development theorists have considered non-governmental microfinance institutions MFIs as the leading practitioners of sustainable development through financing micro-entrepreneurial activities. Our analysis points to the complex power dynamics of mediation, suggesting that there are 'uneasy passages' between neoliberalism and feminism, ones that help re-signify the meaning of financial discourses while re-politicizing women's social and economic exclusions. Because microfinance is often not regulated such that lending often happens informally and many potential borrowers are not aware of the benefits and risks of products and services offered by microfinance institutions and commercial banks. Following this approach some microfinance institutions, such as the Indian SKS Microfinance or the Mexican Compartamos, are already listed on stock exchanges in order to attract investors. Also, conventional investors have realized that microfinance may be an investment opportunity that creates attractive financial returns. Therefore, a good number of working-age adults around the world depend on informal moneylenders for loans to start or maintain a micro-enterprise. In many developing countries, such as India, Bangladesh, and Honduras NGOs provide credit services to the poor to promote self-employment and income growth Baruah ; Pitt et al. Furthermore, many are not able to access loans, mainly due to their illiteracy or knowledge in regional languages Hasan

Though microfinance is often seen as a concept useful for achieving sustainable development, it is also criticized.

Micro-finance services have potential for equitable and sustainable development Garikipati ; Hermes and Lensink ; Kabeer ; Rahman and in addition to providing those in need with financial capital, many microfinance institutions focus on gender equality, which is another key goal of sustainable development Khan ; Rahman ; Rankin ; Smyth ; Weber and Ahmad

The role of microfinance in poverty reduction

The micro-credit scheme of Grameen Bank of Bangladesh, providing micro-loans to landless poor women in rural areas of Bangladesh, for instance, became a successful equitable and sustainable development initiative Dowla ; Karim ; Khandker ; Mohiuddin Simultaneously, however, this relation induces a series of compromises, whereby EEWs adopt neoliberal modes of governance. Morgan In many developing countries, such as India, Bangladesh, and Honduras NGOs provide credit services to the poor to promote self-employment and income growth Baruah ; Pitt et al. Through fieldwork, interviews and documents, we investigate the institutional practices, cultural discourses and struggles that EEWs develop in order to expose the particular ways in which feminist organizations interact with the world of finance and state institutions. Furthermore, many are not able to access loans, mainly due to their illiteracy or knowledge in regional languages Hasan Microfinance service offers not only the microcredit but also the allied services such as consulting and training for the microenterprises as well as market information and access to wider market which is very often not in reach of micro-entrepreneurs due to their lack of knowledge and bureaucratic hurdles. Their results suggest that a pure commercial approach has less impact on sustainability goals, such as poverty alleviation and empowerment. Since the last decade, the role of microfinance has received significant attention, from both policy makers as well as academics Bartual Sanfeliu et al. Consequently, poverty alleviation is necessary to deal with by any effective program related to sustainable development Chokor ; Duraiappah Many institutions from the first group are dependent on donor subsidies to manage the high costs of lending in order to maximize poverty alleviation efforts. Therefore, until to date, investments in microfinance have been mainly done because of philanthropically motives J. Strategically, microfinance plays a vital role for the poor to raise their own microenterprises to escape from poverty Al-Mamun et al.
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Microfinance Research Papers