Microfinance Management System: Core Transaction II

Vol.4, No.1

Abstract

Microfinance is a financial service that provides small loans to low-income individuals or
groups who lack access to traditional financial services. The purpose of this study was to
examine the impact of microfinance on the core objectives of poverty reduction and financial
inclusion. The use of microfinance has become increasingly popular in the last few decades
as a tool to reduce poverty and increase financial inclusion in developing countries. However,
despite its widespread use, there is still some debate about its effectiveness and whether it
achieves its intended goals.

The results of this study showed that microfinance had a positive impact on poverty reduction
and financial inclusion. Microfinance clients reported higher levels of income and savings
compared to non-clients, and they were also more likely to have access to credit. The
interviews and focus groups revealed that microfinance had helped clients to start or expand
their businesses, improve their living conditions, and gain a sense of empowerment and
dignity.

These findings suggest that microfinance can be an effective tool for poverty reduction and
financial inclusion. However, it is important to note that the impact of microfinance may vary
depending on the context in which it is implemented. Factors such as the regulatory
environment, the availability of support services, and the level of competition may all influence
the effectiveness of microfinance. Additionally, while microfinance can help to improve the
lives of individuals and communities, it is not a panacea for poverty and should be seen as part
of a broader set of policies and programs aimed at promoting sustainable economic
development.