Revisiting Microfinance as an Instrument of Sustainable Development

Abstract

Today, financial viability and the creation of social value form the main axis for the operation of inclusive firms. However, depending on who offers the ideas for inclusive enterprises, there can be questionable presumptions regarding what is promised in relation to poverty. One dubious premise is that all poverty can be solved by the market. Markets may be a prerequisite but not sufficient condition for resolving social problems. Financial inclusion through microfinance is a crucial facet of social inclusion. At the World Summit for Social Development (WSSD) in March 1995, governments made a commitment to eradicate poverty on a global scale, citing it as a moral, social, political and economic imperative. One of the three main objectives of the WSSD was the eradication of poverty. Microfinance provides financial services for persons living below the poverty line and for small businesses that lack access to traditional banking services and related products. Microcredit is the lending of small amounts of money to underserved consumers. Microfinance succeeded where institutional financing failed, but its viability is in question. An all-encompassing approach is required to support the growth of the new microfinance sector and manage the balance that must be struck between outreach and sustainability. It is well known that only efficient institutions can greatly lower the long-term expense of serving irregular and low revenues.

Citation

Sengupta, R., Patil, A. and Lone, S. (2024), "Revisiting Microfinance as an Instrument of Sustainable Development", Goel, R., Singh, T., Rahman, M.M., Islam, Q.T. and Baral, S.K. (Ed.) Creating Pathways for Prosperity (Emerald Studies in Sustainable Approaches to Poverty Alleviation), Emerald Publishing Limited, Leeds, pp. 67-84. https://doi.org/10.1108/978-1-83549-121-820241006