Role of Microfinance in Poverty Reduction: Ghana as Case Studies

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Effect of Micro Savings on Poverty Reduction in Central Region of Ghana

Effect of Micro Savings on Poverty Reduction in Central Region of Ghana

Despite these interventions the number of people living with poverty continues to rise in rural Ghana (GSS, 2014). While several factors could be responsible, this study concentrates on the role of microfinance in the poverty reduction strategy of Ghana. Leading advocates of microfinance interventions such as Yeboah (2010) and Stewart et.al. (2012) have argued that, microfinance helps lift people out of poverty by raising incomes and consumption, not just smoothing them. However, Arhin-Sam (2013), Roodman and Morduch (2013) and Awarwoyi (2014) have all found statistically insignificant association between microfinance interventions and poverty reduction. Given the findings of the above studies and the lapse of time, the projection of microfinance as a poverty reduction strategy needed to be revisited. This study therefore sought to investigate whether new evidence has emerged to support the ability of microfinance interventions to eradicate poverty or otherwise from the point of view of clients who own micro small and medium enterprises in Central Region of Ghana to give a clearer understanding as to how microfinance interventions affect poverty reduction in Ghana.
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Microfinance and Poverty Reduction in Ghana.  The Case of Central Region of Ghana

Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana

sample to the various categories of clients defined by business sector, size of enterprise, gender and level of education etc. Since the majority of the beneficiaries of micro-credit are illiterates and semi-literates who live in the rural areas, the research used a combination of interview and questionnaire, case studies, and focus group discussions to collect the primary data. The questionnaire and interviews were used to collect both quantitative and qualitative data from the respondents (individual Micro and small scale enterprises, and Microfinance Institutions) who fell within the sample. Case studies were used to assemble more detailed qualitative information/data from a few selected micro-entrepreneurs who have unique impact experiences. This method revealed interesting client stories and important impact statements. The participatory approach on the other hand was in the form of focus group discussions which examined divergent or differing opinions about certain issues and also validated contradictions in some of the information emerging from the use of the other survey instruments. Secondary data mainly involved a review of related literature on Microfinance and poverty reduction. The financial situations of the clients before and after joining the microfinance scheme were compared to examine the extent of the change in their financial position as a result of the Microfinance programme. Here the assumption was that the respondents were able to accurately remember their conditions before joining the scheme if they did not have records of the data. Simple tables were generated to analyse the data.
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Microfinance Interventions and Poverty Reduction among Entrepreneurs of Micro, Small and Medium Entreprises in Central Region of Ghana

Microfinance Interventions and Poverty Reduction among Entrepreneurs of Micro, Small and Medium Entreprises in Central Region of Ghana

a statistically significant strong positive effect on ability to educate children, however access to credit had a weak positive effect on growth in income, increase in consumption expenditure and acquisition of assets as indicators of poverty. Microinsurance on the other hand had strong positive effect on growth in income, acuisition of business assets and ability to educate children. Microinsurance however had a statistically weak positive effect on increase in consumption expenditure. The study therefore concluded that microfinance interventions are effective poverty at reducting poverty in Central Region of Ghana. The moderator, Regulatory Framework had a statistically significant moderating effect on the relationship between microfinance interventions and poverty reduction and its inclusion in the model increased the predictive of growth in income and acquisition of business assets. However its predictive power on increase in consumption expenditure and ability to educate children was insignificant. Accordingly, the study recommended that: prudential regulations on non-bank financial intermediaries by strengthened for the realization of the full benefits of microfinance interventions, the Central bank should carry out frequent and thorough institutional appraisal of the microfinance industry to ensure that its policies on lending are properly implemented, funding agencies such as Masloc established to support the small scale sector should not adopt a blanket financing option for all categories of businesses but rather, policies aimed at promoting the performance and growth of micro and small enterprises should adopt a sectorial approach. The study contributes to the finance theory by explaining how the study variables account for poverty reduction and in particular helps to answers the unending debate about the role of microfinance interventions in poverty reduction. Academicians will form a basis for future studies out of the research gaps identified by this study. Limitations highlighted include the inability of descriptive cross sectional design to capture the time effect of microfinance interventions on poverty reduction, the inability to extend the research outcome to other parts of Ghana other than the study locale, lack of studies adopting similar variable for empirical comparisons. The study recommends that further studies should employ Randomised Control Trials over a longitudinal period. Additionally the study recommend more primary studies using differenent predictors
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The Impact of Microfinance on Poverty Reduction (A case study of Okara, Southern Punjab, Pakistan)

The Impact of Microfinance on Poverty Reduction (A case study of Okara, Southern Punjab, Pakistan)

Ahmad & Naveed, (2004) stated about microfinance in term of reducing poverty. They conducted the research to find the role of microfinance for poverty elevation in district Rahim Yar Khan and that microfinance provided by Khushali bank Ltd (KBL). Correlation analysis was used to find the relation of microfinance with income, asset formation, crop production, farm expenses and savings. There was a direct relation of microfinance with income, asset formation, crop production, saving and farm expenses. Moreover, the microfinance is efficiently helping the poor people and increasing their living standards by providing them loan for livestock, working capital and cotton in above mention district.
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Achieving Poverty Reduction Through Microfinance: Evidences From the Philippines

Achieving Poverty Reduction Through Microfinance: Evidences From the Philippines

Even as microfinance holds a lot of promise in reducing poverty, questions continue to emerge about its effectiveness in reducing poverty. Some of these criticisms are as follows. First, most critics question the ability of MFI’s to strike a balance between two competing incentives. This is because while MFI’s must strive to fulfil their mission of poverty reduction, they also have to chareg interest rates to stay afloat. This is a source of controversy as some critics consider these interest rates as being too high (Fernando 2006; Hughes et al 2000) Second, concerns have also been raised that an increase in the number of MFI’s results in cuts in government expenditure in public safety net programs (Neff 1996) Third, while MFI’s claim to empower their clients who are mostly females, critics argue that measuring empowerment is difficult and studies that show empowerment are often case studies that apply specific contexts. (Leach et al 2002; Karlan et al 2007) Last, microfinance critics also argue that microfinance is not effective as a country like Bangladesh where microfinance started still remains a poor country. (Surowiecki 2008)
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IMPACT OF MICROFINANCE ON POVERTY ALLEVIATION IN ONDO STATE, NIGERIA

IMPACT OF MICROFINANCE ON POVERTY ALLEVIATION IN ONDO STATE, NIGERIA

Theoretically, several other channels through which microfinance assists the poor have been properly articulated in the literature (Little, et al. 2003, Hulme 2000, Binswanger and Khandker 1995 and Chowdhury, 2009). However, the role of microfinance in reducing poverty has been disputed in the literature. DFID (2009) asserts that international microfinance experience shows that micro credit is not a suitable tool to assist the chronically poor. Hickson (2001) submits that most microfinance institutions have a long way to go in reaching the extremely poor so as to effectively achieve the goal of poverty alleviation. Srinivas (2004) argues that microfinance facilitate the diversion of valuable aid money from untested and non-viable microfinance programs- away from vital programs on health, education that are in dire need of such funds. Asides, some other critics of microfinance have contended that poor people are bad borrower, especially women; or that microfinance is not profitable 2 . In short, conflicting views surround microfinance and its effectiveness at reducing poverty in the less developed economies (LDCs). This has led to several empirical studies on microfinance and poverty reduction in the developing economies.
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The Role of Islamic Microfinance in Poverty Alleviation: A Case of Esaar Microfinance Program of Helping Hand for Relief and Development (HHRD)-Pakistan

The Role of Islamic Microfinance in Poverty Alleviation: A Case of Esaar Microfinance Program of Helping Hand for Relief and Development (HHRD)-Pakistan

Frasca (2008) undertakes two seminal case studies in the use of Islamic finance instruments in MFIs: a) the Sanduq project in Jabal Al-Hoss, Syria; and b) the Hodeidah Microfinance Programme (HMFP) in Hodeidah, Yemen. He concludes that Islamic MFIs can be both competitive with conventional MFIs in the region and meet the reported demand for religiously tailored financial services for lower income groups. If we are to assume that microfinance, in general, can improve the standard of living and alleviate poverty, Islamic MFIs appear to be doing as well as their conventional microfinance counterparts. Karim et al. (2008) conducted a survey, which includes 125 institutions in 19 Muslim countries. It shows that Islamic microfinance providers still reach only 300,000 clients, one-third of them in Bangladesh alone. They argue that to reach more people and build sustainable institutions, it is essential to focus on designing affordable products, training and retaining skilled loan officers and administrators, improving operational efficiency, and managing overall business risk.
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THE ROLE OF ETHIOPIAN MICROFINANCE INSTITUTIONS IN POVERTY ALLEVIATION: THE CASE OF OROMIA CREDIT AND SAVING INSTITUTION

THE ROLE OF ETHIOPIAN MICROFINANCE INSTITUTIONS IN POVERTY ALLEVIATION: THE CASE OF OROMIA CREDIT AND SAVING INSTITUTION

It is commonly asserted that MFIs are not reaching the poorest in society. However, despite some commentators’ scepticism of the impact of microfinance on poverty, studies have shown that microfinance has been successful in many situations. According to Littlefield, Murduch and Hashemi (2003, p.2) “various studies…document increases in income and assets, and decreases in vulnerability of microfinance clients”. They refer to projects in India, Indonesia, Zimbabwe, Bangladesh and Uganda which all show very positive impacts of microfinance in reducing poverty. For instance, a report on a SHARE project in India showed that three-quarters of clients saw “significant improvements in their economic well-being and that half of the clients graduated out of poverty” (2003, p.2). Dichter (1999, p.26) states that microfinance is a tool for poverty reduction and while arguing that the record of MFIs in microfinance is “generally well below expectation” he does concede that some positive impacts do take place. From a study of a number of MFIs he states that findings show that consumption smoothing effects, signs of redistribution of wealth and influence within the household are the most common impact of MFI programmes (ibid.). Hulme and Mosley (1996, p.109) in a comprehensive study on the use of microfinance to combat poverty, argue that well-designed programmes can improve the incomes of the poor and can move them out of poverty. They state that “there is clear evidence that the impact of a loan on a borrower’s income is related to the level of income” as those with higher incomes have a greater range of investment opportunities and so credit schemes are more likely to benefit the “middle and upper poor” (1996, pp109-112). However, they also show that when MFIs such as the Grameen Bank and BRAC provided credit to very poor households, those households were able to raise their incomes and their assets (1996, p.118).
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Great expectations: microfinance and poverty reduction in Asia and Latin America

Great expectations: microfinance and poverty reduction in Asia and Latin America

The PAT is an outreach, as compared with an impact, assessment and therefore does not directly address the question of what impact the programs have on their clients. Conducting a rigorous impact assessment is challenging. It is not simply a case of looking at a group of borrowers, observing their income change after they took out micro loans and establishing who has risen above the poverty line. Accurate assessment requires a rigorous test of the counterfactual – that is how income (or whatever measure is used) with a microcredit compares with what it would be without it, with the only difference in both cases being the availability of credit. This requires empirically a control group identical in characteristics to the recipients of credit and engaged in the same productive activities, who have not received credit, and whose income (or other measure) can be traced through time to compare with that of the credit recipients. A practitioner-friendly impact assessment toolkit is also available: the result of the Assessing the Impact of Microenterprise Services (AIMS) Project. This assessment tool has been used in longitudinal studies of the impact of programs in Peru (Mibanco), India (SEWA) and Zimbabwe (Zambuko Trust). This procedure looks at change over time and matches pairs of observations between borrowers and members of a control group, where each pair have similar starting values for the impact variable (like income or sales revenue) and other characteristics, like age, gender or sector of activity. Simplifying, this approach identifies impact as:
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The Impact of Microfinance on Poverty Reduction Amongst Farmers in Ghana

The Impact of Microfinance on Poverty Reduction Amongst Farmers in Ghana

Recent studies have shown that, agriculture finance is often hindered by the government’s interference in the credit market and, this is more pronounced in some developing countries (Ledgerwood et al., 2012). The challenges often come in the form of price control, through institutional measures that affect market prices for agricultural produce or export and import restrictions, thereby, inhibiting the repayment ability of agricultural clients. Moreover, government and donor agencies in some instances have tried to regulate the interest rates on borrowings, particularly for small and marginal holder farmers, thus affecting agricultural financing (Westercamp et al., 2015). Furthermore, in some countries, there is often direct intervention by governments with a specific policy to improve agricultural credit through a range of conduits, either through loan cancellation after a bad harvest or during election periods for political favour. Thus, this inhibits the financial institutions’ ability to extend credit to the agricultural sector. Moreover, individual private service providers would be discouraged due to subsidised credit to farmers or cooperatives (van Empel, 2010). For example, In India, between 1990 and 2008, the government offered an agricultural debt “waiver scheme” to small and marginal farmers, thus, compounding the problems or unwillingness of financial institutions to offer agricultural clients credit (Das and Kumbhakah, 2012). In support of Das and Kumbhakah (2012), Ledgerwood et al., (2012) observe that, political interference in agricultural funding for small and marginal farmers, is increasingly becoming more prevalent especially in developing countries due to the fact that, the sector is often seen simply as agriculture instead of agro-enterprise or agri-business. Miller and Atanda, (2011) argue that, lending is not suitable, nor profitable, for subsistence farming, though there are financial products namely, insurance and savings for “income smoothing” that are appropriate for these borrowers. Similarly, Ledgerwood et al., (2011) posit that, in spite of the effort to improve credit to farmers, it is the prerogative of the credit institutions to make lending decisions. The analysis of the literature showed that, poor people indeed have problems accessing finance from conventional banks and this is compounded because of political interference.
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Microfinance as an Instrument in Financing the Rural Sector with an Impact on Poverty Reduction and Economic Development: Albanian Case

Microfinance as an Instrument in Financing the Rural Sector with an Impact on Poverty Reduction and Economic Development: Albanian Case

Agricultural producer’s opportunities for additional financial resources over the past two decades, faced a lot of constraints which have impacts on production, farm restructuring and investments to be carried out. These restrictions are a result of a combination of factors derived from the incomplete and costly information in rural financial markets and a number of specific problems that characterize the rural sector. An efficient rural financial market, plays an important role in the development and growth of productivity in agriculture and livestock. This means setting up a financial system to meet the typical functions of a market economy and above all the mobilization and allocation of financial resources of this sector and their coordination with donors and the state budget resources. On the other hand, the construction of an institutional framework that provides funding in accordance with the request of the rural sector is a necessary condition for the efficiency of the funding in this sector. Expansion and well-functioning farms and other agricultural activities, requires more than natural resources, requires financial resources to make these natural resources more efficient. Of the two main sources of capital, external and internal, domestic funds are the most important component. In most countries with low incomes and especially in periods of transition, financing through microcredit 1 is dominant in the rural sector.
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Microfinance and Poverty Alleviation

Microfinance and Poverty Alleviation

borrowers and instead favor the “richer” poor who can afford to take out larger loans (Wright 2000:262; Simanowitz 2000). The second reason that microfinance may not reach the poorest of the poor is the pariah status of the very poor (Simanowitz and Walter 2002:36). Just as there are large divides in wealthy countries between the rich and poor, impoverished communities may have social segregation between the poor and the destitute. The destitute, also referred to as the very poor or the poorest of the poor, may be shunned from the rest of society. Sometimes it is discrimination from the “richer” poor that drives the destitute away from society, and consequently, away from MFI programs, but often it is the destitute who segregate themselves (Wright 2000:262; Simanowitz 2000; Simanowitz and Walter 2002:36). The very poor, who lack even basic needs, avoid contact with the rest of society out of shame. They may have lice or parasites, they may lack decent clothing, or they may simply be too embarrassed to display their extreme poverty in public. Simply put, microfinance is not always an attractive option to the very poor (Simanowitz 2000). A destitute family that struggles every day to survive will rarely have the energy to launch into an ambitious, business enterprise. The poorest of the poor can barely meet basic needs much less run an entire business and they lack the necessary education, management skills, and social networks (Simanowitz 2000; Garson 1997:7). The trouble is that if training were to be provided by the MFI it would cripple the ability of the institution to become financially sustainable (Robinson 2001:73).
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Financial Development, Growth and Poverty Reduction: Evidence from Ghana

Financial Development, Growth and Poverty Reduction: Evidence from Ghana

However, three issues mo- tivate this paper. Firstly, the existing studies have produced conflicting findings, leaving the finance-growth-poverty debate open for further research. Secondly, the literature has largely excluded African countries despite the incidence of poverty being prevalent in most of these countries. Thirdly, existing studies have mostly failed to account for structural changes and omitted variables, thereby making their results somehow questionable. It is against this background that we re-assess the finance-growth-poverty debate by concentrating on an African country, Ghana. Here, we attempt to avoid the previous specification problems by accounting for structural breaks and omitted variables.
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Bridging the SME Financing Gap in Ghana: The Role of Microfinance Institutions

Bridging the SME Financing Gap in Ghana: The Role of Microfinance Institutions

Apart from the need to boost SME capacities, some financial instruments can help provide missing information or reduce the risk stemming from some SMEs’ lack of transparency. Franchising, which is very popular in Southern and East Africa with the encouragement of South Africa, allows use of a brand name or know-how that reduces the risk of failure. Warehouse-receipt financing (in South Africa, Kenya and Zambia) guarantees loans with agri- cultural stocks. Other financial instruments, such as leasing and factoring, can reduce risk effectively for credit institutions but are still little used in Africa. Credit associations that reduce risk by sharing it are more common. They help financial institutions choose to whom to lend, by guaranteeing the technical viability of projects, and sometimes providing guarantees. But growth of these bodies is limited by the lack of organization among SMEs in Africa and by their focus on certain sectors and geographical areas. Governments and donor sources have thus preferred creation of guarantee funds to ensure repayment in case of default. In several countries, especially in Central Africa, this has not worked since provision of a guarantee has meant less rigorous choice of investment projects and a lower rate of debt recovery. Elsewhere, notably in Mozambique, borrowers and financial institu- tions have worked together to maintain a good rate of recovery and to reduce interest rates.
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Harmonization Of Microfinance Regulation In Ghana: Panacea To Microfinance Problems In Ghana.

Harmonization Of Microfinance Regulation In Ghana: Panacea To Microfinance Problems In Ghana.

8.3 Harmonization of Microfinance regulation in Ghana The regulatory system of Microfinance in Ghana encourages flexibility of entry and then adjusting of regulation to suit local conditions of the companies. The study found that there are different regulatory systems for microfinance institutions in Ghana and this creates an opportunity for the emergence of many microfinance companies and the proliferation of financial service providers. It was noted that Microfinance Institutions are regulated by their Apex bodies (GHAMFIN) under the Non- Banking Financial Institutions Act, 2008 (Act 774). Rural and Community banks are regulated under the banking Act 2004 (Act 673). Savings and loans companies are also regulated by the Non -Banking Financial Institutions Act, 2008 (Act 774). The formal financial institutions have thus come under regula- tion with legal, prudential and other supervisory guidelines in place. Credit Unions on the other hand have their apex bodies that promote their operations and activities. It must be men- tioned that there are no definitive regulatory framework that underpins their roles and give them recognition as apex. The Credit Unions Association has initiated the passage of an Act to regulate the activities of the Association. At the 2015 Inter- national Credit Union Day in Takoradi on October 17, 2015, the National Chairman of the Credit Unions Association in Ghana announced that a legislative Instrument (LI) has been issued on the bill. The study found that Microfinance Institu- tions operate under the Non- Banking Financial Institutions Act 2008 (Act 774) which is not specific to Microfinance. The ab- sence of specific regulation for these institutions means that there is no elaborate and transparent process for the licensing, regulation and supervision
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Microfinance Helps to Rural Women for Poverty Reduction in the District of Bogra, Bangladesh

Microfinance Helps to Rural Women for Poverty Reduction in the District of Bogra, Bangladesh

Abstract The primary objective of this study was to examine the role of microfinance programs in poverty reduction among the poor women in Bogra District. The study was based on data collected from a total of 400 microfinance beneficiaries, which was recruited using a simple random sampling in the year 2011. The study findings suggested that there was no significant relationship of microfinance on specific variables such as household income, education opportunities, employment, health, nutrition, sanitations facilities and women`s empowerment in the district of Bogra. Only housing status of microfinance beneficiaries had improved during their membership periods. This study proposed a poverty reduction model that includes various aspects including political and social policy reformulations; natural disaster management; employment opportunities;financial assistances; zakat and social safety nets; proper healthcare for the poor; education and knowledge institutions; technical or skills development training; vocational education; development infrastructure and shelter; women`s empowerment and capacity building; as well as women`s human rights and social justice in order to be more effective in understanding and finding solutions to mitigate poverty in general.
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Sustainable Institutions or Sustainable Poverty Targeting: The Case of Microfinance

Sustainable Institutions or Sustainable Poverty Targeting: The Case of Microfinance

effect dominates income effect at lower levels of income and hence labor should also become more attractive (Sharp et al, 2012). Thus, the initial expectations from microfinance were to increase income and consumption of the poor; to make their labor more productive; and to reduce their vulnerability to adverse shocks as well (Sievers & Vandenberg, 2007). A number of more positives such as better education, health and housing, women empowerment and the likes are also expected to improve with the provision of microcredit (Hermes & Lensink, 2011). Enough time has elapsed since the first micro loan was extended by Muhammad Younas in Bangladesh and enough replications and extensions are being seen of the Grameen Bank model around the world. But where we stand now? Had there been any visible improvements made in the living standards of the Third World poor or microfinance was and is an exercise in futile? Initial research findings, in this regard, were very encouraging (e.g. Mosley & Hulme, 1998, Morduch, 1999, Morduch & Haley, 2002, Robinson, 2001, Imai et al., 2012) but skepticism increased with the passage of time and further research (e.g. Goetz & Gupta, 1996; Scully, 2004, Simanowitz, 2002, Hulme & Mosley, 1996; Marr, 2004, Kirkpatrick & Maimbo, 2002; Mosley, 2001, Bateman, 2010; Hermes & Lensink, 2011). Interestingly, most of the success stories relates to the old poverty lending approach of microfinance, while most of the discomfort originates with the new financial system approach to microfinance. With this observation in mind, this paper is an attempt to outline how microcredit can help alleviate poverty and which approach, i.e. the old poverty lending approach or the new financial system approach, is more likely to achieve the goal of poverty alleviation. The rest of the paper is organized in three sections. Section two, starts with a brief introduction to the two approaches to microfinance, presents and solves our basic theoretical model. Section three evaluates the implications of the two approaches to poverty alleviation through the lenses of our model. Section four concludes with some policy recommendations for the stake holders.
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The Role of Islamic Microfinance for Poverty Alleviation in Mogadishu, Somalia: An Exploratory Study

The Role of Islamic Microfinance for Poverty Alleviation in Mogadishu, Somalia: An Exploratory Study

receives a small loan and agrees to shoulder a monetary penalty in the case of default by a peer (Abdul Rahman, 2010). Under such group-based lending arrangements, the group members have incentives to monitor each other for the greater good (Abdul Rahman, 2010; Ahmed, 2002). Although microfinance has been widely recognised as a poverty alleviation tool, some scholars criticise interest-based microfinance as being exploitative (Hudon and Sandberg, 2013). Ahmed (2002) pointed out that the borrowers of conventional microfinance often take additional loans from other sources to pay the instalments and thus become trapped in a vicious debt cycle. Furthermore, Ahmed (2002) noted that microfinance has a high drop out rate and rate of non- graduation from poverty. This view is supported by other researchers such as Abdul Rahman and Dean (2013) as well as Smolo and Ismail (2011).
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The Role of Agricultural Growth in Poverty Reduction in Indonesia

The Role of Agricultural Growth in Poverty Reduction in Indonesia

1) The Presidential Instruction on Disadvantaged Villages (INPRES IDT), the Disadvantaged Village Infrastructure Development Program (P3DT), and the IDT Nutritional Program for school children. The objective of the IDT program was to accelerate poverty reduction in less developed village across Indonesia. The programs started in 1993, and provides a grant of Rp 20 million to Rp 60 million for each village deemed to have been left behind by the development process. The funds were intended to be given to the community to undertake grass-roots poverty alleviation activities. Linked to the IDT programs were P3DT which provides infrastructure block grant funds directly to the villages. The key elements of these two programs were an increased emphasis on village-level participation. In addition, the IDT program was complemented by a food supplement program for primary school children which targeted impoverished families.
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Microfinance and its Impact in Poverty Alleviation in Nigeria: A Case Study of some Microfinance Banks in Edo State.

Microfinance and its Impact in Poverty Alleviation in Nigeria: A Case Study of some Microfinance Banks in Edo State.

Previous researches concerning micro-financing have assessed if micro-finance programmes popular in Nigeria can reach the comparatively poverty stricken populace and susceptible in their actions. Modern researches have revealed proof of optimistic influence as it correlates to six Millennium Development Goals (Adamu, 2007; Irobi, 2008; Wrigth, 2000; Zaman, 2000; McCulloch and Baulch, 2000), all pledged to consider that microfinance is an efficient and dominant instrument for alleviating hardship. For instance, Amin, Rai, and Topai (2003) concentrated on the capability of microfinance to get to the underprivileged as well as asserted that microfinance has provided individuals under as well as over the line of poverty. Also, the outcomes of experimental proofs signifies that the most underprivileged can gain from microfinance together on financial and socio-economic welfare position, furthermore that this can be accomplished devoid of putting at risk the monetary and financial survival of Micro-credit organizations (Zaman, 2000; Robinson, 2001; Dahiru and Zubair,2008). For example, Khandker (2005), discovered that every additional 100 taka of loan and advances to females increase entire yearly family spending by over 20 taka. This research illustrates an awesome advantage of boost in earnings and a decrease of susceptibility.
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