How Can Microfinance Programs Help the Struggle Against Social Problems Such as Begging, Child Labor, Prostitution, Violence Against Women, Criminality, Gangs, and Drug Addiction?

This paper examines how group based programs that serve the poorest sectors of the developing world are able to build pathways to healthier, more fulfilling, and productive lives for their members. It looks at several microfinance programs that have made an impact on social problems by taking group interaction beyond product delivery and collection needs.

The paper examines the social dynamics that move these programs beyond the development finance arena into effective strategies for solving seemingly intractable social problems. It analyzes how groups create restorative communities that move dialogue beyond revisiting group members’ current plights to a creative reimagining of their individual and collective place in the world. Finally, the paper identifies specific conditions that are needed for effective program design. Cases examined in the paper are:

• Small Enterprise Foundation (SEF)/Intervention with Microfinance for AIDS and Gender Equity (IMAGE), South Africa;
• National Union of Disabled Persons of Uganda (NUDIPU) We Can Manage program;
• Grameen Struggling Members (Beggars) program;
• BRAC’s Targeting the Ultra-Poor program and Graduation Model pilot projects;
• Other group-based microfinance models that address social problems by building social capital, namely Jamii Bora and Pro Mujer.