Paper
Microfinance and the Millennium Development Goals
Does microfinance contribute to attaining the Millennium Development Goals?
2 pages
This paper examines the effectiveness of microfinance for reaching the Millennium Development Goals (MDGs). It draws evidences from a study conducted by CGAP that assesses the access to financial services by the poor and its resulting effect on reaching the MDGs. It summarizes the results of recent professional studies on the impact of microfinance, recognizing the difficulties of comparing studies that apply different levels of methodological rigor.
Further, the paper raises the following questions and seeks to answer them:
- How does microfinance contribute to the MDGs?
- How does microfinance support the eradication of extreme poverty and hunger?
- How does access to financial services improve education?
- How does access to financial services improve the health of children and women?
- Does microfinance support public infrastructure?
- How does access to financial services empower women?
Finally, the paper suggests the role of donors in using microfinance to help achieve the MDGs:
- Communicate to staff that access to financial services contributes to the attainment of the MDGs;
- Support different kinds of financial institutions that provide an array of financial services to the poor;
- Approach microfinance as part of a private sector or financial sector development strategy;
- Support government policies that promote the deepening of the financial sector to reach poorer clients;
- Recognize the limitations of microfinance in achieving poverty alleviation.
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