Recommendations for future research - Factors Impeding the Poverty Reduction Capacity of Micro-credit: Some Field Observations from Malawi and Ethiopia
Recommendations for future research - Factors Impeding the Poverty Reduction Capacity of Micro-credit: Some Field Observations from Malawi and Ethiopia
research and in-depth investigation. First and foremost, there is a need for extensive empirical
evidence to verify and ascertain the capabilities of micro-credit in reducing the depth and scope
of poverty. Specific attention, investigation and analysis needs to be given to the characteristics
of micro-credit delivery mechanisms and strategies that are in existing practice. In this, there is a
need to investigate and identify innovative approaches to micro-credit delivery that will reduce
poverty sustainably. In addition, there is a need to analyse the features and characteristics of
micro-credit within a gender and empowerment framework, and to question the extent to which
access to credit and income generated thereof gives women in rural Africa the power and confidence
to negotiate gender sensitive division of labour, roles, authority and decision-making autonomy.
Furthermore, based on the observation that profit oriented MFIs have a better outreach in the
rural areas, there is a need to further investigate and integrate poverty reduction mechanisms and
strategies within existing MFI structures. In this regard, further investigation can be carried out to
establish viability of means and ways to place greater demonstrated accountability for social and
economic poverty reduction on the MFI together with the government.
On a more macro level there is a need to analyse the poverty reduction and economic growth
trade-off when targeting the ‘not-so-poor’ versus targeting the ‘poorest of the poor’ within the
micro-credit industry and framework. In this, specific attention can be given to the debate on
providing relief and/ or grants to achieve meaningful poverty reduction.
Last but not least, there is a need to identify possibilities of merging the positive aspects of
commercial banking, such as the comparatively lower interest rates, with the advantages offered
by the MFI, such as satisfying the needs of the micro-borrower, whereby allowing borrower to
have maximum benefit in the process of poverty reduction. Therefore, empirical evidence and
case studies analysis should be carried out to understand clearly the differences and similarities of
these two forms of institutions and where they can come together for effective poverty reduction
and empowerment of the poor.
ECONOMIC RESEARCH PAPERS
NO 74
(January 2003)
Factors Impeding the Poverty Reduction Capacity of Micro-credit: Some Field Observations from Malawi and Ethiopia
by
Sunita Pitamber
Recommendations for future research Factors Impeding the Poverty Reduction Capacity of Microcredit Some Field Observations from Malawi and Ethiopia - To learn more about this author, visit African Development Bank's Website.
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In light of the conclusions drawn above, there is a need for further policy and action oriented
research and in-depth investigation. First and foremost, there is a need for extensive empirical
evidence to verify and ascertain the capabilities of micro-credit in reducing the depth and scope
of poverty. Specific attention, investigation and analysis needs to be given to the characteristics
of micro-credit delivery mechanisms and strategies that are in existing practice. In this, there is a
need to investigate and identify innovative approaches to micro-credit delivery that will reduce
poverty sustainably. In addition, there is a need to analyse the features and characteristics of
micro-credit within a gender and empowerment framework, and to question the extent to which
access to credit and income generated thereof gives women in rural Africa the power and confidence
to negotiate gender sensitive division of labour, roles, authority and decision-making autonomy.
Furthermore, based on the observation that profit oriented MFIs have a better outreach in the
rural areas, there is a need to further investigate and integrate poverty reduction mechanisms and
strategies within existing MFI structures. In this regard, further investigation can be carried out to
establish viability of means and ways to place greater demonstrated accountability for social and
economic poverty reduction on the MFI together with the government.
On a more macro level there is a need to analyse the poverty reduction and economic growth
trade-off when targeting the ‘not-so-poor’ versus targeting the ‘poorest of the poor’ within the
micro-credit industry and framework. In this, specific attention can be given to the debate on
providing relief and/ or grants to achieve meaningful poverty reduction.
Last but not least, there is a need to identify possibilities of merging the positive aspects of
commercial banking, such as the comparatively lower interest rates, with the advantages offered
by the MFI, such as satisfying the needs of the micro-borrower, whereby allowing borrower to
have maximum benefit in the process of poverty reduction. Therefore, empirical evidence and
case studies analysis should be carried out to understand clearly the differences and similarities of
these two forms of institutions and where they can come together for effective poverty reduction
and empowerment of the poor.
ECONOMIC RESEARCH PAPERS
NO 74
(January 2003)
Factors Impeding the Poverty Reduction Capacity of Micro-credit: Some Field Observations from Malawi and Ethiopia
by
Sunita Pitamber
Recommendations for future research Factors Impeding the Poverty Reduction Capacity of Microcredit Some Field Observations from Malawi and Ethiopia - To learn more about this author, visit African Development Bank's Website.
Like this article? Share it with your friends
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