Even three decades after microfinance began, the controversy whether microfinance is reaching the “poorest of the poor” still exists. Part of the problem is that it is difficult to create an accurate methodology to assess the impact of microfinance on the hard-core poor, defined as those earning less than one dollar a day. Contradicting studies and statistics of the impact of microfinance on the hard-core poor have added to the controversy. Both sides make convincing arguments. On one hand, the hard-core poor can barely afford money for food and medicine, so paying back a micro-loan with interest could add to their burden. For instance, microfinance was unsuccessful in the “poorest of the poor” segment in Haiti. On the other hand, there is evidence that shows that the hard-core poor have sought informal financial services, particularly for savings.
Continue reading “Does Microfinance Help the Hard-core Poor?”
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