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Finance for the poor: from microcredit to microfinancial services

Author

Listed:
  • Imran Matin

    (Research and Evaluation Department, Bangladesh Rural Advancement Committee (BRAC), Dhaka, Bangladesh)

  • David Hulme

    (Institute for Development Policy and Management, University of Manchester, UK)

  • Stuart Rutherford

    (Institute for Development Policy and Management, University of Manchester, UK, and Managing Director of SafeSave, Dhaka, Bangladesh)

Abstract

This paper reviews the achievements of the 'microfinance revolution', through reference to the now extensive literature. It finds that there are many opportunities to improve and innovate. To illustrate this finding, the paper concentrates on examining what we need to know to design and deliver better financial products to the poor, especially the poorest. It argues that financial services for the poor are essentially a matter of helping the poor turn their savings into sums large enough to satisfy a wide range of business, consumption, personal, social and asset-building needs. The range of such 'swaps' should be wide enough to cater for short, medium and long-term needs, and they must be delivered in ways which are convenient, appropriate, safe and affordable. Providing poor people with effective financial services helps them deal with vulnerability and can thereby help reduce poverty. However, the relationship is driven by complex livelihood imperatives and is not simple. Microfinance is not a magic sky-hook that reaches down to pluck the poor out of poverty. It can, however, be a strategically vital platform that the poor can use to raise their own prospects for an escape from poverty. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Imran Matin & David Hulme & Stuart Rutherford, 2002. "Finance for the poor: from microcredit to microfinancial services," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(2), pages 273-294.
  • Handle: RePEc:wly:jintdv:v:14:y:2002:i:2:p:273-294
    DOI: 10.1002/jid.874
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    File URL: http://hdl.handle.net/10.1002/jid.874
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    References listed on IDEAS

    as
    1. Morduch, Jonathan, 2000. "The Microfinance Schism," World Development, Elsevier, vol. 28(4), pages 617-629, April.
    2. repec:pri:rpdevs:morduch_microfinance_poor is not listed on IDEAS
    3. Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, World Bank Group, vol. 4(3), pages 351-366, September.
    4. Zeller, Manfred & Schrieder, Gertrud & von Braun, Joachim & Heidhues, Franz, 1997. "Rural finance for food security for the poor," Food policy reviews 4, International Food Policy Research Institute (IFPRI).
    5. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-250, September.
    6. Mosley, Paul & Hulme, David, 1998. "Microenterprise finance: Is there a conflict between growth and poverty alleviation?," World Development, Elsevier, vol. 26(5), pages 783-790, May.
    7. Lipton, Michael, 1976. "Agricultural finance and rural credit in poor countries," World Development, Elsevier, vol. 4(7), pages 543-553, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Christian Ambrosius & Barbara Fritz & Ursula Stiegler, 2014. "Remittances for Financial Access: Lessons from Latin American Microfinance," Development Policy Review, Overseas Development Institute, vol. 32(6), pages 733-753, November.
    2. Togba, Edith Leadaut, 2012. "Microfinance and households access to credit: Evidence from Côte d’Ivoire," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 473-486.
    3. Janda, Karel & Zetek, Pavel, 2014. "Mikrofinanční Revoluce: Aktuální Kontroverze A Výzvy
      [Microfinance Revolution: Recent Controversies And Challenges]
      ," MPRA Paper 54098, University Library of Munich, Germany.
    4. Hilson, Gavin & Ackah-Baidoo, Abigail, 2011. "Can Microcredit Services Alleviate Hardship in African Small-scale Mining Communities?," World Development, Elsevier, vol. 39(7), pages 1191-1203, July.
    5. Müller, Daniel, 2013. "A General Equilibrium Analysis of Inflation and Microfinance in Developing Countries," Working papers 2013/06, Faculty of Business and Economics - University of Basel.
    6. Joshua K. Ault & Andrew Spicer, 2014. "The institutional context of poverty: State fragility as a predictor of cross-national variation in commercial microfinance lending," Strategic Management Journal, Wiley Blackwell, vol. 35(12), pages 1818-1838, December.
    7. Gunhild Berg, 2010. "Evaluating The Impacts Of Microsaving: The Case Of Sewa Bank In India," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(1), pages 75-96, March.
    8. repec:ags:eeaeje:258845 is not listed on IDEAS
    9. repec:pal:jorsoc:v:60:y:2009:i:1:d:10.1057_palgrave.jors.2602527 is not listed on IDEAS
    10. repec:ipn:esecon:v:12:y:2017:i:46:p:41-60 is not listed on IDEAS
    11. Geissler, Kimberley H. & Leatherman, Sheila, 2015. "Providing primary health care through integrated microfinance and health services in Latin America," Social Science & Medicine, Elsevier, vol. 132(C), pages 30-37.
    12. Ozgur Emre Ergungor, 2010. "Bank Branch Presence and Access to Credit in Low- to Moderate-Income Neighborhoods," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(7), pages 1321-1349, October.
    13. Asad K. Ghalib, 2011. "Estimating the depth of microfinance programme outreach: empirical findings from rural Pakistan," Global Development Institute Working Paper Series 15411, GDI, The University of Manchester.
    14. Janda, Karel & Zetek, Pavel, 2014. "Survey of Microfinance Controversies and Challenges," MPRA Paper 56657, University Library of Munich, Germany.
    15. Paul, Sohini, 2013. "The Credit-worthiness of a borrower and the selection process in Micro-finance: A case study from the urban slums of India," MPRA Paper 48116, University Library of Munich, Germany.
    16. repec:ags:apstra:250222 is not listed on IDEAS
    17. Mekonnen, Tigist, 2017. "Financing rural households and its impact: Evidence from randomized field experiment data," MERIT Working Papers 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Paxton, Julia & Young, Lauren, 2011. "Liquidity Profiles of Poor Mexican Households," World Development, Elsevier, vol. 39(4), pages 600-610, April.
    19. Mersland, Roy, 2005. "Microcredit for self-employed disabled persons in developing countries," MPRA Paper 2068, University Library of Munich, Germany.
    20. Rebecca L. Thornton & Laurel E. Hatt & Erica M. Field & Mursaleena Islam & Freddy Solís Diaz & Martha Azucena González, 2010. "Social security health insurance for the informal sector in Nicaragua: a randomized evaluation," Health Economics, John Wiley & Sons, Ltd., vol. 19(S1), pages 181-206, September.
    21. Thapa, Ganesh, 2006. "Sustainability and Governance of Microfinance Institutions: Recent Experiences and Some Lessons for Southeast Asia," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 0(Number 1-), pages 1-22, December.
    22. Bradstock, Alastair, 2005. "Changing livelihoods and land reform: Evidence from the Northern Cape province of South Africa," World Development, Elsevier, vol. 33(11), pages 1979-1992, November.
    23. Alex Winter-Nelson & Anna A. Temu, 2005. "Liquidity constraints, access to credit and pro-poor growth in rural Tanzania," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 867-882.
    24. Jones, Gareth A. & Dallimore, Anthea, 2009. "Wither participatory banking?: experiences with village banks in South Africa," LSE Research Online Documents on Economics 23354, London School of Economics and Political Science, LSE Library.

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