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Implications Of Microfinance In Gambia

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1. INTRODUCTION Microfinance has been of a great interest in the recent past, particularly in the context of reaching the poorest families in a more effective way. The word microfinance is being used very often in development vocabulary today. Although the word is literally comprised of two words: micro and finance which literally mean small credit; the concept of microfinance goes beyond the provision of small credit to the poor. Christen (1997) defines microfinance as 'the means of providing a variety of financial services to the poor based on market-driven and commercial approaches'(Christen R.P., 1997). This definition encompasses provision of other financial services like savings, money transfers, payments, remittances, and insurance,…show more content…
There is great optimism as the growth of microfinance has shown that the poor are creditworthy, while the formal banking institutions serve only investment-worthy clients who are non-poor. However, to eliminate poverty, microfinance must be carried out in a sustainable way and cheaply, reaching a massive scale of the poor, with continuous improvement in the quality of service delivery. My study will therefore focus on the impact of microfinance in alleviating poverty in the rural Gambia. 2. THE RESEARCH PROBLEMS There has been a lot of emphasis on the importance of access to financial services by the poor and marginalized as a means of reducing poverty in many forms. Microfinance Institutions (MFIs) have been said to reach the population living below the poverty line with valuable financial services and mostly targeting a large number of poor. Has microfinance, therefore, contributed in the reduction of poverty in the rural Gambia? 3. PURPOSE OF THE RESEARCH Microfinance institutions as a body of delivering financial services to a previously ignored, excluded and disadvantaged population, who are also the poor, is expected to make changes in the lives of the poor. The poor, who lack access to funds to take advantage of the opportunities, should be able to generate income and accumulate assets as microfinance delivers the financial
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