article · INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT
Poverty restricts basic human rights and creates broader social instability. While microfinance programmes have operated globally since the 1970s to address these challenges, questions continue to surround their actual effectiveness in relieving poverty. An empirical case study evaluating the operational impact of microfinance institutions confirms that they make a significant contribution to poverty alleviation, particularly within rural communities. Operational difficulties persist within these institutions, however. To maximise their effectiveness, microfinance providers must adapt their services to address the diverse circumstances of disadvantaged populations, with specific focus directed toward the needs of the severely poor.
Understanding whether microfinance truly alleviates poverty helps funding bodies and financial institutions allocate capital where it helps most. Demonstrating that microfinance aids rural populations, while calling for products tailored specifically to the most destitute, provides clear guidance for developing more targeted, equitable anti-poverty programmes.
This empirical work informs operational strategies for microfinance institutions and rural lenders seeking to refine their financial products. Potential users include microcredit operators and development finance bodies aiming to serve underprivileged demographics. Because it evaluates existing microfinance models, the insights are applied and directly relevant to ongoing institutional operations, though the abstract does not describe a commercial technology or product pipeline.
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Poverty leads to the denial of all human rights and poses a threat to peace. Microfinance emerged across the globe to reduce poverty in the early 1970s, invented by Professor Muhammad Yunus, an economist. The effect of microfinance in reducing poverty is constantly questioned, despite its substantial contribution to aiding the underprivileged globally. To address this pressing issue, this study investigates the relationship between microfinance and poverty alleviation, as well as the impact of microfinance on poverty alleviation. Using an empirical case study, this paper investigates how far microfinance institutions play a significant role in relieving poverty. Although there are certain issues with its operation, according to our research findings, the study concludes that microfinance can make a significant contribution to alleviating poverty in rural areas. The study also advises that this organization should pay more attention to the diverse needs of the poor, particularly the severely poor.
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DOI: 10.56201/ijefm.v10.no11.2025.pg97.104
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