Most researchers acknowledge that a sustained exit from poverty is complex and no single causal pathway from poverty to non-poverty exists. Back to resources searchliterature review on poverty reduction strategies aimed at the very poor by zahra campbell-avenell in ad pdf (123.
However, microfinance has its own challenges that include inadequate physical and financial infrastructure, unsupportive policy environment, limited institutional capacity, inadequate investment in the rural areas, inadequate support in social capital development, microfinance misconceptions and so r, the overarching question is about the viability of microfinance as a strategy for alleviating rural poverty and its efficacy as a strategy in the different contexts. Theoretical and empirical literature suggest that microfinance can be used to support savings and investments, consumption smoothing and food security, agricultural activities, non-farm activities, enterprise development and social cohesion.
The rural economy therefore fails to explore other avenues that are vital for the alleviation of poverty. Summarythe failure of traditional poverty reduction programs in achieving deeper outreach to the very poor is a growing concern, as evidenced by the united nation’s millennium development goals (mdgs) which envision extreme poverty to be halved by 2015.
Magner (2007) observes that from previous studies and research, it is clear that microfinance is importantly a catalyst for the alleviation of section discusses the impact of microfinance on variables such as income, consumption, savings, assets, employment, diversification of economic activities and local trade. This paper attempts to bring togetherthe empirical works that were done in different contexts to shedlight on the important relationship between microfinance andpoverty.
Designing services to help the very poor often means taking into account the historic, sociopolitical and economic factors that contribute to the persistence of poverty. The impact analysis from literature shall be based on the summarized microfinance poverty reduction nexus (see table 1 below) that was developed by the asian development bank (2000).
An analysis of empirical works shows thatmicrofinance enhances poverty alleviation despite the challengessuch as the indian andhra pradesh crisis. In this review, we present a summary framework for categorizing the various theorized pathways out of poverty, and evaluate the empirical evidence for which interventions and resulting outcomes are most frequently and most strongly associated with poverty alleviation.
The analysis is driven by literature searches on empiricalworks done by different researchers in different ative research methodology was adopted, following a desktopapproach. Purpose of this paper is to carry out an empirical analysisof the link that exists between microfinance and povertyalleviation.
An increase in income and asset position is a widely acceptable measure of poverty alleviation. Leigh andersontravis reynoldsabstract: the literature on poverty’s causes and cures in developing countries posits a variety of contributing factors.
This paper therefore aims to consolidate the selected empirical studies thus establishing the impact of microfinance on poverty. We conducted a literature review on pathways out of poverty for low-income households in developing countries and identified and categorized general strategies and outcomes demonstrated to be empirically associated with poverty alleviation.
Contrariwise, they established regressive (negative) impacts for poorer households (those in the absolute poverty category) but for richer households, they established positive influences. Non-farm activities are also very important in poverty alleviation because of their consumption smoothening mechanism.
We organized the general strategies into four asset groups that could be targeted to alleviate poverty: human, natural, built / financial, and social / political. Microfinance also sets the poor free from the ‘chains’ of usurious private moneylenders hence reducing the severity of social exclusion and poverty.
Thus the microfinance strategy is neither a panacea nor a ‘magic bullet’ in poverty alleviation (armendariz de aghion & morduch, 2005; ahmed, 2010; zhan & wong, 2014). An increase in productive capacity will in turn improve production hence reducing poverty through increased output, income and employment.
Off-seasons lack economic activity and people tend to be idle hence production falls and this increases their vulnerability to poverty. Impact of microfinance on food security and poverty alleviation: a review and synthesis of empirical evidence.
Daley-harris cites a study of share microfin limited of india where it was established that the strongest impact on poverty status was the increase in asset ownership. Many research works on microfinance depend uponpersonal anecdotes, thus this present paper attempts to compilethe scattered empirical findings on microfinance and classification:e21, g21, inance, poverty, poverty alleviation, empirical review, inance is increasingly gaining currency as a poverty alleviation intervention.
The international poverty centre reported that even in relatively successful countries such as ghana and tanzania, only about 6 percent of the population had access to banking services (hailu, 2008). Illiteracy contributes to poor business management hence borrowers backslide into poverty and/or default on loans.