Changes in the Microfinance Industry?

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Permalink Reply by Sophia Dawkins on February 22, 2010 at 4:09pm

I hold the adamant belief that people cannot empower other individuals; people can only empower themselves. One aspect of microfinance programming that development interventions under-emphasize is the power of microsavings groups to sow the seeds of confidence and self-empowerment.

Where individuals face resource constraints or lack start-up capital for income generation activities, microsavings groups provide a low-risk starting point for people to pursue their aspirations. The Mpendulo Project run by the Nelson Mandela Metropolitan University in the Eastern Cape, South Africa shows just this. In environments like the Jeffreys Bay Township, where Mpendulo operates, beneficiaries struggle to honor loans of any type. However, savings groups have provided the foundation for participants to achieve basic economic resilience before establishing credit relationships.

Savings groups serve as building blocks so that the very poorest can reduce their exposure to risk and pursue their hopes. I hope to see greater focus on savings groups as institutions that share the fruits of the microfinance industry with the most vulnerable.

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