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What has failed: microfinance or evaluation methods?

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  • Sefa Awaworyi Churchill
  • Ahmed Salim Nuhu

Abstract

This research note reflects on existing research and perspectives on the efficacy of microfinance as a poverty alleviation tool. We argue that while the story about the success of microfinance is widespread, its failure is also well documented at various levels. More importantly, systematic reviews of the existing research on microfinance performance do not support the efficacy of microfinance. This suggests that microfinance has failed. However, these reviews are based on studies that have adopted widely criticized empirical/quantitative techniques. Thus, in this research note, we attempt to sensitize both the research community and policy-makers to reconsider what has really failed in the context of microfinance, and act accordingly.

Suggested Citation

  • Sefa Awaworyi Churchill & Ahmed Salim Nuhu, 2016. "What has failed: microfinance or evaluation methods?," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 6(2), pages 85-94, April.
    • Handle: RePEc:taf:jsustf:v:6:y:2016:i:2:p:85-94
    DOI: 10.1080/20430795.2016.1176424
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    References listed on IDEAS

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    4. Imai, Katsushi S. & Arun, Thankom & Annim, Samuel Kobina, 2010. "Microfinance and Household Poverty Reduction: New Evidence from India," World Development, Elsevier, vol. 38(12), pages 1760-1774, December.
    5. James Copestake, 2002. "Inequality and the polarizing impact of microcredit: evidence from Zambia's copperbelt," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(6), pages 743-755.
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    Cited by:

    1. Sefa Awaworyi Churchill, 2017. "Microfinance and Ethnic Diversity," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 112-141, March.
    2. Jordan, Matthew R. & Dickens, William T. & Hauser, Oliver P. & Rand, David G., 2022. "The role of inequity aversion in microloan defaults," Behavioural Public Policy, Cambridge University Press, vol. 6(2), pages 303-324, April.

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