Is microfinance making a difference?

Aug 31, 2011|Research | comments -

For the past 15 years, microfinance has been touted as key to poverty alleviation in developing economies. To date an estimated 10,000 microfinance institutions have dispersed USD $25 million to between 150 and 200 million clients worldwide. But is microfinance fulfilling its initial promise? What issues and controversies have arisen around the topic? Is the current model of microfinance sustainable for future borrowers? These and many other issues were addressed at the ’Second European Research Conference on Microfinance’ on June 16-18 2011 in Groningen. The conference was co-organized by the University of Groningen and the European Microfinance Platform.

Girl in a Sari Sari shop financed by a micro loan
Image “A Sari Sari shop financed by a micro loan” by Andy Maluche (CC BY-NC)

One of the difficulties in assessing the effectiveness, impact and sustainability of microfinance has been the reliance on anecdotal evidence of its positive effects; however in the past few years better and more reliable research, based on empirical analyses and conducted with more effective research methodologies, has been advancing.

The 'Second European Research Conference on Microfinance' provided a much-needed platform for the presentation of the latest research on a variety of pressing topics related to microfinance. Eight keynote speakers presented their innovative ideas during plenary and panel discussions each day; this included Dr. Paul Mosley (University of Sheffield UK) on ‘Innovations in Microinsurance’ and Klaas Molenaar (Triodos Facet) on ‘The importance of microfinance for entrepreneurship development’.


Parallel to these plenaries and panel discussions, each day some of the 60-plus international scholars in attendance at the conference presented their own research papers across a wide variety of themes. This included such themes as ‘Microfinance and the financial crisis’, ‘Gender and microfinance’, ‘Poverty impact and social impact’, and ‘New contributions to microfinance theory’. One high point of the weekend event was the Grand Conference Evening on Friday evening, which featured the official launch of Marc Labie’s new book The Handbook of Microfinance which Professor Labie (University of Mons, Belgium) co-edited with Prof. Beatriz Amendariz (University College London, UK and Harvard University, US).


For those interested in joining the European Microfinance Platform’s upcoming event, European Microfinance Week, designed for European microfinance professionals working with developing countries and scheduled for 2-4 November 2011 in Luxemburg, see event details.