Microfinance Literature Review

Microfinance is being considered to be one of the successful techniques for poverty relief. However, there are different views against the performance of microfinance and the physiognomies of the beneficiaries who are actually supported through microfinance. It can be explained that microfinance has particular influences on the lives of poor individuals. The logic in support of microfinance is that microfinance has brought different poor women out of poverty and encouraged financial sustainability. In that context, microfinance organisations get financial sustainability through patronizing informal micro businesses in this world. Informal micro businesses make job creation that increases earnings, decreases poverty and achieve sustainability.

Though, some consent is that microfinance is not the successful technique for enhancing living standard, empowering women and reducing poverty. Though, the major aim of this study is to review the performance of microfinance, particularly for enhancing the income level of the deprived people in community that would make social capital and improve the national financial growth. It is important to observe micro finance as it has particular role in poverty reduction, social growth, and women empowerment. The influence of this literature review can be on the individuals related in various sectors like, education, agriculture, health and social growth as some of them are acquiring the advantages of micro credit. It will also support the individuals to take decision who are focused to come under the services of micro credit. This literature review will support policy makers to take essential strategy about micro credit. Students will also be supported by this literature review that will be focused to understand micro

The capability approach is an economic theory developed by Sen and Nussbaum (Nussbaum 2011a; Nussbaum and Sen 1993; Sen 1989; Sen 1999; Sen 2004) that proposes an alternative framework to traditional approaches of welfare economics. The focus of the entire approach is on capability, "the freedom that a person has to lead one kind of life or another" (Nussbaum and Sen 1993, p.3), and human life is described as a "combination of doings and beings, which can be generically called functionings" (Nussbaum and Sen 1993, p.3). Individuals may be more or less able (capable) to achieve this set of functionings depending on resources available to them and the context in which they live. For this reason, capabilities are conceived as the freedom to choose a meaningful life. Consequently, the evaluation of the quality of life should focus more on individuals ' freedom (capabilities) and less on their final set of achievements (functionings). The two main concepts of the approach are capabilities and ‘functionings’ typo. First, central to the approach is the idea that human development refers to "the real opportunity that we have to accomplish what we value" (Sen, 1992, p.31). This understanding calls for people to be seen “as being actively involved – given the opportunity – in shaping their own destiny" (Sen, 1999, p.53), as opposed to passive beneficiaries of development