finance and Its Role in Poverty Alleviation

Abstract

Poverty remains a persistent global challenge, disproportionately affecting vulnerable populations lacking access to conventional financial services. In response, microfinance has emerged as a prominent development strategy, aiming to provide small loans, savings facilities, and other financial products to low-income individuals and micro-entrepreneurs. This research explores the multifaceted role of microfinance in poverty alleviation, examining its mechanisms, impacts, and effectiveness. It analyzes how access to microcredit can empower individuals, particularly women, by fostering entrepreneurship, increasing income-generating activities, improving household consumption, and enhancing resilience against economic shocks. The study delves into both the direct economic benefits and the broader social implications, such as improved health, education, and social status within communities. While acknowledging the significant potential of microfinance to contribute to sustainable development and poverty reduction, the abstract also briefly considers the complexities and challenges, including issues of interest rates, outreach, and the need for complementary support services. Ultimately, this research aims to provide a comprehensive understanding of microfinance as a critical tool in the ongoing global effort to combat poverty