Amala Times

In the early 2000s, the microfinance sector was on a roll. It was accessing capital markets for growth, securing regulatory legitimacy, developing savings and insurance products in addition to credit, demonstrating social performance, and working on institutional transformation.

Away from the spotlight, microfinance institutions (MFIs) continues to grow, thrive and serve hundreds of millions of people, using their familiar methods and feeling little need to adjust. But as 2020 approaches, the digital juggernaut has changed the world around them in ways they cannot ignore.


Microfinance is usually thought of as microcredit. When people say microfinance, many think of it as a small loan, often to a woman. In Asia, where I’ve spent a lot of time recently, the way this works is that a number of women co-guarantee each other’s small loans. We’re talking about small loans to set up or to grow a small business. This loan is repaid over, say, six to 12 months. Typically, around five women cross-guarantee each other’s loans.

Microfinance institutions were originally intended for financing the poor communities to help them sustain living, build better houses, acquire basic education and fight against poverty. With such primary mission, the performance of microfinance projects was measured by social impact of the projects to the warfare of the intended community (Brau & Woller, 2004; Morduch, 2000). This was until 1990’s, when there were changes in the focus among different microfinance stakeholders requiring the institutions to focus not only of social impact but also on efficiency use of funds and as well as sustainable operations.

The sustainable development goal carters in emphasis in combating of poverty and improving the standard of lives of people. That is a general overview which aims at promoting the continental and global economic development to people. These goals however are set by the international organisation vested with powers to support and help human development they do not cut across to the grassroots where exactly the real problems arise.

That is to say no matter how international platforms may address the state of poverty the truth is these factors needs to be practiced and exercised locally and dealt from the grass root of the problem. It is not enough to make laws and regulations that address or establish a matter but it takes implementation or in other words executions and enforcements upon these laws that we make.

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