Impact Of Microfinance

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The above section showed the studies which claim a positive impact of microfinance. This section presents some literature emphasizing the negative or no impact of microfinance on the different aspects of the borrowers of the microfinance.
Meier and Rudolf concluded that Microfinance did not help to reduce the poverty and to increase the standard of living of a poor person. They stated this might be due to the inefficiency of the microfinance institutions.
Sefa studied that microcredit does not have a significant impact on the poverty reduction and microenterprises. So, there exists no strong evidence that microfinance helps to improve the well-being of poor. The burden of repayment of loan forced the poor to sell their pre-existed assets. …show more content…

They studied two Chilean and five Brazilian microcredit programs and concluded that Brazilian microcredit programs have a positive and significant impact on the client’s income especially when they are served by the banks. While on the other hand, the results from the Chilean bank-based program were weaker and insignificant. However, in the case of Chilean NGOs, they concluded that impact of microfinance on the income is negative instead of positive.
Okafor organized a study to analyze the impact of microfinance banking activities on the poverty alleviation in Nigeria. Data for this purpose were collected from Central Bank of Nigeria and National Bureau of Statistics. The result from this study suggested that microfinance bank activities in Nigeria were not playing a significant or positive role. Microfinance did not help to reduce the poverty from the …show more content…

This study states that in Pakistan not all microfinance funds are generating to the poor but to the non-poor are benefiting more. Only 30 % poor get the microfinance loan. Although this study showed some sort of impact on the poor borrowers, still lack the information whether all poor have access to the microfinance and what is the impact of microfinance in Pakistan.
Sonia found that people do not have easy access to the loan. There exists a limitation of about 15000- 20000 rupees that are not according to the requirement of the people. The Interest rate is very high and they do not aware about the high rate of interest and bank policies. Therefore, this study concluded that only 67% of respondents were satisfied and have an increase in their income and standard of

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