Economic Empowerment of the Poor, Myths and Facts about Microfinance Institutions in Africa
Loading...
Date
2022
Authors
Kaberia, Salome Kanini
Muathe, Stephen M. A.
Journal Title
Journal ISSN
Volume Title
Publisher
IJSSERS
Abstract
Poverty remains a stubborn menace that has defied time the world over, with the relatively less
developed economies suffering its brunt the most. Consequently, various stakeholders have explored
and implemented all possible strategies to alleviate poverty. It is no wonder, therefore, that the
prospect of microfinance solving this challenge led to aggressive embracing of microcredit by both
local communities and other stakeholders alike. Through microfinance, stakeholders anticipated that
affordable access to finance for the marginalized populations would see them start up or expand their
businesses, hire more labor, grow family incomes and improve their living standards. Moreover, it
was assumed that the business owners and their communities would cross over the poverty line and
ultimately microfinance would alleviate poverty from the communities and empower them
economically. However, microfinance is now proving to be yet another mirage in the elusive journey
towards a poverty free world. Almost two decades since the United Nation’s declaration of the year
2005 as the International Year of microfinance, it is an opportune time to take stock of the impact of
microfinance; what has worked well, what needs tweaking and what needs to be decelerated for the
desired outcome to be achieved. The study used a desktop design where secondary data was reviewed
extensively. There were mix findings where there was evidence that there were facts about
microfinance institutions alleviating poverty and empowering the poor in Africa. However, there
were also myths about microfinance institutions where the lenders were taking advantage of the poor
and exploiting them through predatory lending, thus making the poor even poorer and with debts;
thus, demonstrating that microfinance has been shrouded by myths rather than facts. Therefore, there
is need for civic education and entrepreneurial education on microfinance. Additionally,
governments should initiate clear regulations in order to protect the very poor Africa citizens. Future
research should incorporate primary data to corroborate findings of this study.
Description
Article
Keywords
Africa, Economic Empowerment, Financial Inclusion, Microcredit, Micro Finance Institutions, Poverty alleviation, Predatory lending
Citation
Salome Kanini Kaberia, Dr. Stephen M. A. Muathe (2022). Economic Empowerment of the Poor: Myths and Facts about Microfinance Institutions in Africa. International Journal of Social Science and Education Research Studies, 2(6), 179-186