Myths of microfinance as a panacea for poverty eradication and women empowerment
Onyuma, S.O.; Shem, A.O.
Savings and Development 29(2): 199-222
2005
DOI: 10.2307/25830894Document Number: 265032
The discussion of whether provision of microcredit to the poor could change the social equation and the condition in which the poor, especially women, live in rural areas is a current debate. This review identifies five myths of microfinance: (1) microfinance programmes assist the poorest of the poor; (2) the informal sector is the engine for economic growth in developing countries; (3) microfinance in developing countries contribute to women empowerment; (4) microfinance-NGOs are the perfect development conduit for assisting developing countries; and (5) lack of credit is the main constraint facing women entrepreneurs. It is concluded that the poor need more than micro-loans; they need holistic rural development approaches and other comprehensive programmes that address their lack of access to and control of productive resources, difficulties in accessing labour opportunities, formal education, work skills, and gender bias.