Microfinance as a Strategy to Curb the Global Recession

The major barrier is global recession behind the socio-economic development of any economy. Low level or poor economic growth in developed and developing economies means increasing probability of a global recession in near future period. United Nations has warned about the forthcoming crucial condition. It is assumed that warning lights would be flashing around poverty, gross domestic product (GDP), trade wars, currency circulations, financial autonomy and financial volatility etc. India is a country where 60% of the population depends on agriculture (according to World Bank reports), microfinance can play an important role in providing financial services to the low-income households. Microfinance is a strategy for providing better access to finance to the unbanked people of an economy, which may have impact on economic growth within territory. The impacts can be explained in various aspects or areas such as household level, individual level, enterprise level, job creation etc. (DONOR BRIEF No. 13, July 2003, CGAP, World Bank.). Here the term poverty is used in place of global recession metaphorically. The following chapter is based on the analysis of the impacts of microfinance activities upon poverty alleviation in three countries, India, Bangladesh and Nigeria where loans from microfinance institutions and deposits in the microfinance institutions are taken as the explanatory variables of the model. It is derived that there are positive and significant impact of financial activities of microfinance institutions on poverty alleviation for the selected nations except Nigeria.