n African Review of Economics and Finance - Microfinance: Perils and Prospects, Jude L. Fernando (Ed.) : book review

Volume 4, Issue 2
  • ISSN : 2042-1478
  • E-ISSN: 2410-4906


Microfinance gained tremendous popularity in the 90's, following the unprecedented success of the Grameen Bank which continues to provide millions of dollars in loans to poor people in Bangladesh via their internationally recognized microfinance program. Some important characteristics associated with microcredit are collateral free lending, low interest loans, reaching the poorest of the poor, and the formation of credit groups (p. 25). Greater participation and maximization of social capital, along with increased empowerment, poverty reduction, and providing opportunities and capital for entrepreneurship are all beneficial impacts associated with present-day microfinance interventions; which have also tended to prioritise the provision of loans to women. While there have been documented cases of failure, on balance, impressive loan repayment rates, participation rates of women, and improved entrepreneurial skills, are examples of key successes associated with microfinance. This evidence of success is also used to support the propagation of the microfinance model, as a strategy for poverty reduction and empowerment of women.

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