Microfinance and Poverty Reduction

The provision of credit and other financial services has become increasingly seen as the answer to the problems facing poor people. Microfinance interventions have the capacity to increase incomes, contribute to individual and household security, and change social relations for the better. However, it may not be assumed, argue the authors of this book, that they will do so and it may often be more effective in terms of poverty reduction to combine credit provision with other development activities. Considering various types of finance schemes, this text compares the effectiveness of different approaches in aiding poverty reduction. The book emphasizes the importance of first studying the local context, and then considering the macroeconomic factors which may be operating upon the economy of a particular country. Five extended case studies, in the Gambia, Ecuador, Mexico, Pakistan, and the UK are examined with reference to further aspects of sustainability and impact assessment.