Microfinance Impact on Household Poverty Levels

Abstract

Purpose: The aim of the study was to investigate Microfinance Impact on Household Poverty Levels Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study's findings highlighted that microfinance has a mixed impact on household poverty levels. While treated households experienced increased income, consumption, and investment, overall poverty reduction remained modest. Notably, the positive effects were more pronounced for households with pre-existing entrepreneurial skills. The relationship between microfinance and women's empowerment was complex, as these programs had varying impacts on income generation and decision-making among women. Furthermore, group-based microcredit programs led to improved household welfare for both genders, with females experiencing more significant poverty reductions. Unique Contribution to Theory, Practice and Policy: Financial Inclusion Theory and Social Capital Theory may be used to anchor future studies on Microfinance impact on household poverty levels. Offer financial literacy training and business development support to borrowers. Enforce policies that protect borrowers from predatory lending practices, ensuring transparency in loan terms and preventing coercive debt collection tactics