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
To learn more about this author, visit African Development Bank's Website.
Like this article? Share it with your friends
|
|
African Development Bank
(Visit African's Website)
The African Development Bank is the
premier financial development institution
of Africa, dedicated to combating poverty
and improving the lives of people of the
continent and engaged in the task of
mobilizing resources towards the economic
and social progress of its Regional Member
Countries.The Bank’s s mission is to
promote economic and social development
through loans, equity investments, and
technical assistance.
The ADB is a multilateral development bank
whose shareholders include 53 African
countries and 24 non-African countries
from the Americas, Asia, and Europe. It
was established in 1964, with its
headquarters in Abidjan, Côte d’Ivoire,
and officially began operations in 1967.
|
|
|
African Development Bank's
Complete
List Of
African-Accounts
Articles
|
|
If you enjoyed this article, get African Development Bank's Complete List of African-Accounts Articles For FREE!
|
|
|
|