In recent years, several analysts have carried out research in efforts to authenticate the value of offering microcredit to entrepreneurs and fledgling businesses in tackling poverty. The analysts were interested in finding out the link between microfinancing and developments in education, health, and women empowerment. What were the results?
After analysis of data from some 90 studies, the researchers discovered that, on average, when businesses and entrepreneurs are given access to microloans, the impact was significantly small but positive. Overall, microloans were found to impact positively on venture profitability, entrepreneurial health, and venture growth. Interestingly, the non-financial impact was shown to be significantly positive. Moreover, the meta-analysis of data determined that access to microloans resulted in desirable effects on specific human development elements like women empowerment, community nutrition, health, and the advancement of children’s education.
Regardless of these precise results that gave a clean bill of health to the effects of state lending and microloans on poverty alleviation, the authors of these studies warned stakeholders to be careful when making conclusions. They pointed out that the analysis did not establish that microfinancing has a significant transformational effect on the lives of poverty-stricken peoples as widely believed.
The analysts concluded that, although the relationships were positive, the overall effects were relatively small. JJS Global is committed to helping entrepreneurs make the most sensible business decisions based on proven facts and real-life successes. Give us a call without delay at 224-535-9462 or send us an email at [email protected].
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