Role of Micro Finance in Reducing Poverty: A Look at Social and Economic Factors

Abstract

The thrust of the study lies in knowing the effect of micro finance on the poverty alleviation. In this study it is analyzed that microfinance is an important element for an effective poverty reduction strategy. The role of MicroFinance on poverty alleviation is checked both in social and economic aspects. The social and economic factors considered in this study include the improvement of life style, accommodation standard, income generation, life standard, purchasing power, expansion of business facility, self-employment and adoption of better technology. Economic growth and development is also considered in this study. It reveals that access and efficient provision of micro credit can enable the poor to smooth their consumption, better manage their risks, gradually build their assets, develop their micro enterprises, enhance their income earning capacity, and enjoy an improved quality of life. It argues that with little efforts, the performance of Micro Finance institutions can be improved and these institutions can play their role better in poverty alleviation than usual.