Reaching the Poorest while Building Financially Self-Sufficient Institutions, and Showing Improvement in the Lives of the Poorest Women and their Families

This paper is about microfinance and its contribution to the eradication of poverty for millions of the world’s poorest people. It also recognises that microfinance is not a panacea and that expectations should not be built up so high that it is bound to fail. Microfinance is reaching and impacting on millions of poor people, predominantly women, but the boundaries of who microfinance can reach, and in what ways, have still to be explored. Many millions more can benefit. It is not the poverty level of potential clients that determines access and impact, but the design of the services provided. Not all people need microfinance, but most groups can benefit. The Millennium Development Goals, arising from the United Nations Millennium Summit, set a critical challenge of halving absolute poverty in the world by 2015.1 Governments and donors around the world responded with plans to work towards the realisation of these goals. Given the success of the microfinance industry in reducing the poverty of millions of people, it is surprising that there has not been a greater focus on microfinance in the Millennium Development strategies developed by donors2 . In this paper I present evidence of the important contribution of microfinance to the eradication of poverty, particularly through the empowerment of poor people to choose when and how to access other development services such as health and education, and reduction in vulnerability. Donors should be investing in poverty-focused microfinance as a key element in their strategies to achieve their Millennium commitments. As the Microcredit Summit campaign passes its half-way point, it moves on from promoting the goal of sustainable microfinance that results in significant positive change in the lives of the poorest women, to reviewing the evidence of its efforts and concluding that these objectives are more than worthy aims – they are being achieved by organisations around the world.

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