The platform for thought Convergences is publishing the study Microfinance Partnerships to help access basic services
Microfinance, by providing small loans to those who are excluded from the formal banking sector, has been developed as a key strategy for reducing poverty. However, despite high recognition and enthusiasm, the impact of microfinance remains debated. The issues of financial sustainability, social impact or replicability regularly resurface, potentially weakening the sector.
Through the present study, Convergences wishes to examine how multi-actor partnerships can help microfinance institutions in their mission to improve the living conditions of the most vulnerable clients and in particular, support them in their access to basic social services.
As food for thought, Convergences conducted a preliminary review of scientific literature about the impact of microfinance on poverty reduction, including 75 documents published between 1990 and 2012. This analysis helped underline the beneficial effects of microfinance: progress toward the MDGs, increase in income and reduction in vulnerabilities. Moreover, this assessment highlighted correlations and strong potential synergies between microfinance and access to essential social services, be it basic education, primary health or livelihood.
For this study, Convergences identified and surveyed 168 microfinance projects across the globe, built on hybrid successful alliances. The objective is to promote a better understanding of microfinance, its positive effects on poverty reduction and its limitations. In this outlook, this study offers an in-depth review of 7 case studies, based on the field experience of project managers, to compare experiences and to come up with concrete proposals to improve practices.
Convergences hopes that this study will encourage microfinance professionals, public donors, private companies and civil society organizations to work together, as part of a New Global Partnership, to advance the collective fight against poverty.
