Paper
Microfinance: A Platform for Social Change
This paper makes the business case for integrating non-financial services with microfinance
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24 pages
This paper argues that although microfinance is an effective poverty alleviation tool, it should be utilized as a platform for multiple empowerment approaches, building on successful microfinance models. The paper states that:
- Over the years, microfinance has demonstrated that its impact goes beyond providing individuals with access to capital;
- Microfinance has helped to protect, diversify and increase sources of income and assets that enable the poor to make their way out of poverty;
- However, for the billions of people who still live on less than two dollars a day and have no access to basic facilities, microfinance must continue to be deployed and leveraged to its maximum potential;
- There is need for microfinance practitioners to understand that:
- Simple access to capital is often not enough for poverty alleviation;
- Poverty is a result of a multitude of factors that encompass more than merely a limited income;
- To properly serve clients needs and fulfill its purpose, microfinance needs to do more to address the underlying factors of poverty than simply providing access to capital.
The paper concludes that:
- An integrated approach to servicing clients can enhance the efficacy of microfinance as a poverty alleviation tool;
- MFIs can contribute to greater sustainability at the client level by acting as a platform to deliver important social services along with credit;
- Using microfinance as a platform to offer integrated services increases economies of scope for organizations.
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