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On the Roles of Microfinance in Developing Countries

microfinance in developing countries

Jordan Jackson, Reginald White

Chapter 3: Role of Microfinance in Promoting Economic Growth, Development, and Sustainability

“Much of the underdeveloped world grows and produces agricultural products. Because many of these underdeveloped nations have very little political clout with the rest of the world, and because farmers in wealthy nations have lots of political power, the goods from these poorer nations are tariffed and quota'd right out of the richer nation's markets.” -Keith Brown, Free Trade & Foreign Policy: The Independent Institute, May 1, 2000 Introduction

The quote above provides a very nice generalization of exactly what we will discover in this chapter: the roles of microfinance in promoting economic growth, development, and sustainability. Microfinance can provide exactly what most of the underdeveloped world needs: capital to invest in themselves in order to reach themselves out of poverty, thus creating self sufficiency. However, as Mr. Brown stated, what microfinance has failed to do (albeit it was not designed to do) is make these

poorer farmers globally competitive. They cannot be competitive due to larger countries' inability to make the free market free for all nations, not just those who control most of it. However, even without making major strides on the global market, microfinance has done most of exactly what it was designed to do. It has brought most of its participants out of a fruitless future, one full of deabilitating poverty.

There are many statistics out on the books about microfinance's effect on the poor of the world. Throughout the chapter, we will go into further detail on how these statistics reflect the exact influence of microfinance on the world, poor and middle class. The statistics will reflect exactly what has been stated in past chapters: microfinance works. It isn't the end-all, be-all solution to the world's poverty, but it is a solid start to eradicate it.

Another topic we will cover in detail is the.

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