Microfinance: A Review of the Challenges and Tactics to Reaching the Poor in Developing Countries

Open Access
Author:
Brewer, Molly Anne
Area of Honors:
Economics
Degree:
Bachelor of Arts
Document Type:
Thesis
Thesis Supervisors:
  • Bee Yan Roberts, Thesis Supervisor
  • Russell Paul Chuderewicz, Honors Advisor
Keywords:
  • Microfinance
  • poverty
  • targeting
  • poorest
  • training
Abstract:
The prevalence of microfinance institutions in developing countries has increased drastically since the beginning of the century. As the field has surged in growth, much research has been focused on quantifying the effects of the organizations. In recent years, a growing literature on the shortcomings of microfinance has emerged. Specifically, microfinance institutions are failing to reach and positively impact the poorest of the poor, the individuals the organizations were created to assist. To overcome this hurdle, microfinance institutions are beginning to offer additional services relevant to the issues faced by the very poor. This paper synthesizes and critically evaluates the research on the ability of microfinance institutions to reach the poorest of the poor, and provides support for the integration of financial and nonfinancial services to successfully assist those living farthest below the poverty line.