Literature review on poverty alleviation

This paper attempts to bring togetherthe empirical works that were done in different contexts to shedlight on the important relationship between microfinance andpoverty. Summarythe failure of traditional poverty reduction programs in achieving deeper outreach to the very poor is a growing concern, as evidenced by the united nation’s millennium development goals (mdgs) which envision extreme poverty to be halved by 2015. Off-seasons lack economic activity and people tend to be idle hence production falls and this increases their vulnerability to poverty.

These become inhibitors to the success of microfinance in poverty alleviation, especially in the rural poor lack access to financial resources hence reducing their capability to meet their health requirements. In this review, we present a summary framework for categorizing the various theorized pathways out of poverty, and evaluate the empirical evidence for which interventions and resulting outcomes are most frequently and most strongly associated with poverty alleviation. Microfinance also sets the poor free from the ‘chains’  of usurious private moneylenders hence reducing the severity of social exclusion and poverty.

Leigh andersontravis reynoldsabstract: the literature on poverty’s causes and cures in developing countries posits a variety of contributing factors. The disaster of illness struck ten of the 17 grameen bank families who are still in the poverty group (magner, 2007, p. Magner (2007) observes that from previous studies and research, it is clear that microfinance is importantly a catalyst for the alleviation of section discusses the impact of microfinance on variables such as income, consumption, savings, assets, employment, diversification of economic activities and local trade.

Microfinance and poverty inance intervention has been received with enthusiasm by governments, foundations, community development groups, non-governmental organizations and even for-profit private firms (carr & zhong, 2002). This has an overall effect of reducing unemployment hence reducing poverty levels and improving the standards of living of the people in the rural communities. This gave an impetus for empirical studies carried out in different countries to investigate the impact of microfinance as a poverty alleviation tool.

Theoretical and empirical literature suggest that microfinance can be used to support savings and investments, consumption smoothing and food security, agricultural activities, non-farm activities, enterprise development and social cohesion. This paper therefore aims to consolidate the selected empirical studies thus establishing the impact of microfinance on poverty. Purpose of this paper is to carry out an empirical analysisof the link that exists between microfinance and povertyalleviation.

Conclusion and paper carried out an empirical literature review, finding out more from other authors, an understanding of microfinance and poverty alleviation. An increase in income and asset position is a widely acceptable measure of poverty alleviation. The international poverty centre reported that even in relatively successful countries such as ghana and tanzania, only about 6 percent of the population had access to banking services (hailu, 2008).

We conducted a literature review on pathways out of poverty for low-income households in developing countries and identified and categorized general strategies and outcomes demonstrated to be empirically associated with poverty alleviation. We organized the general strategies into four asset groups that could be targeted to alleviate poverty: human, natural, built / financial, and social / political. Contrariwise, they established regressive (negative) impacts for poorer households (those in the absolute poverty category) but for richer households, they established positive influences.

Non-farm activities are also very important in poverty alleviation because of their consumption smoothening mechanism. Designing services to help the very poor often means taking into account the historic, sociopolitical and economic factors that contribute to the persistence of poverty. Illiteracy contributes to poor business management hence borrowers backslide into poverty and/or default on loans.

Most researchers acknowledge that a sustained exit from poverty is complex and no single causal pathway from poverty to non-poverty exists. However, microfinance has its own challenges that include inadequate physical and financial infrastructure, unsupportive policy environment, limited institutional capacity, inadequate investment in the rural areas, inadequate support in social capital development, microfinance misconceptions and so r, the overarching question is about the viability of microfinance as a strategy for alleviating rural poverty and its efficacy as a strategy in the different contexts. Back to resources searchliterature review on poverty reduction strategies aimed at the very poor by zahra campbell-avenell in ad pdf (123.

People that are in a position to increase income and assets get empowered to move out of the poverty trap. Impact of microfinance on food security and poverty alleviation: a review and synthesis of empirical evidence. A conducive microfinance operational environment will promote the growth of the sector thus strengthening its poverty alleviation , d.