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Microcredit for Poverty Alleviation and Fostering Environmentally Sustainable Development: A Review of African Case Studies
International Journal of Business Research (2010)
  • Asayehgn Desta, School of Business and Leadership, Dominican University of California
With the hastening of the global poverty crisis and the absence of an adequate social safety net for those marginalized and vulnerable sections of society in the less developed countries, a number of researchers have moved beyond the relentless pursuit of short-term toward long-term anti- poverty, environmentally sustainable paradigms to assist chronically poor sectors of society. Though a remarkably polarizing issue, in the last three decades microcredit programs have been made available to the chronically poor as a viable option to involve them in the formal economic sector. It is assumed that the disadvantaged groups will become productive members of society if they involve themselves in small businesses that may contribute to powerful changes within their lives. Based on anecdotal assessment of the impact of microcredit as a financial instrument, the United Nations declared 2005 as the International Year of Microcredit. Realizing that chronically poor people merit the greatest international attention, using the year 1990 as a baseline, the United Nations has advocated the reduction of both extreme poverty and hunger by half or more by the year 2015, those whose income is below US $1 per person/day.
A review of the existing literature which has burgeoned over the past decades indicates that it would be an over exaggeration to claim that microcredit programs have significantly helped to lift the poor out of poverty. The existing microcredit programs seem to be focusing on borrowers living above the poverty line rather than on the hard core poor. Based on few analyzed empirical case studies, it can be ascertained that the microcredit programs in Africa may not be effective in achieving sustainable development unless the projects are based on longitudinal studies that could: a) systematically address the cause of poverty, b) identify the poverty segments of the population, c) pay special attention to raising the awareness of the chronically poor, and d) train the participants to specialize in environmentally-sensitive new business ventures.
  • Microcredit,
  • Poverty,
  • Poverty alleviation,
  • Environmentally sustainable development,
  • Environmentally sensitive business ventures,
  • Micro-enterprise,
  • Poverty Index
Publication Date
March, 2010
Citation Information
Asayehgn Desta. "Microcredit for Poverty Alleviation and Fostering Environmentally Sustainable Development: A Review of African Case Studies" International Journal of Business Research Vol. 10 Iss. 2 (2010)
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