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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Microenterprise finance: is there a conflict between growth and poverty alleviation?
Authors:Mosley, PaulISNI
Hulme, DavidISNI
Periodical:World Development
Geographic terms:Kenya
Subjects:household budget
small enterprises
business financing
External link:https://doi.org/10.1016/S0305-750X(98)00021-7
Abstract:The idea of reducing poverty in developing countries through the provision of loans by specialized financial institutions to microenterprises, urban and rural, has in recent years generated much acclaim. Until now, however, the exact poverty impact of existing microfinance schemes has in most cases not been adequately calculated. This paper reports on research designed to measure the impact of 13 microfinance institutions in seven developing countries on poverty and other target variables, and to relate such impact to the institutions' design features. The authors first present general data on impact, including data from finance schemes in Kenya's Rural Enterprise Programme, Malawi's Smallholder Agricultural Credit Administration and the Malawi Mudzi Fund. They then offer evidence in support of the idea that there is a systematic positive relationship between impact and household income. The position and slope of the estimated impact curve vary according to the design of the scheme: for 'well-designed' schemes impact, at all levels of income, is higher than for ill-designed schemes. The implications of these findings for antipoverty strategies are discussed. App., bibliogr., notes, sum.