Microfinance Institutions: Millennium Development Goals
This paper examines the contribution that microfinance has made to the achievement of the Millennium Development Goals (MDGs) that the United Nations (UN) has set out. These goals include poverty alleviation, education for children, reduction in child and maternal mortality rates, and access to reproductive health services. The paper argues that when microfinance institutions (MFIs) work in collaboration with Government, industrial houses and social organizations, microfinance can impact MDGs in the areas of:
- Poverty-alleviation;
- Generation of employment and income;
- Improvement of health and nutritional status;
- Empowerment of women;
- Human development.
The paper identifies the following areas where MFIs can positively impact poor households:
- Financial inputs and services to enable entrepreneurs in the informal sector to build and develop their microenterprises;
- Credit along with insurance services to enable small-scale farmers to use high-yielding inputs and adopt new technology to increase their productivity and farm income;
- Affordable credit and convenient savings services to poor families to reduce the impact of seasonal expenses and the devastation of major economic shocks;
- Women's empowerment and building of social capital, to support self help efforts at the family and community levels and to strengthen the women and other marginalized groups.
The paper concludes by suggesting roles that the Union and state governments, the National Bank, commercial banks and cooperatives can play to help MFIs realize the MDGs.
