Rural Microfinance and Poverty Alleviation in Zimbabwe: The Case of Masvingo District
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Date
2011
Authors
Journal Title
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Volume Title
Publisher
University of Fort Hare
Abstract
Microfinance resources are recognized as having an important contribution towards poverty alleviation. Currently, about a billion poor people in the world face exclusion from the formal financial mainstream. The poor people, especially those in the rural areas of developing countries are considered 'unbankable' and traditional financial providers are either unable ·o r unwilling to provide them with finance. Research shows that in Africa, about 5 to 6 % of the population have access to formal banking finance and about 94 to 95 % rely heavily on microfinance institutions. The central argument is based on the notions that the poor are risky borrowers and transaction costs associated with saving this segment are very high relative to the expected return. The rural poor fail to access financial resources because they do not have physical collateral security which is a key requirement of the financial traditional financial providers. Microfinance therefore uses joint liability and peer pressure monitoring to replace the commonly needed physical collateral security. Microfinance gained momentum in the mid-1970s when Muhammad Yunus identified it as a poverty alleviation strategy in Bangladesh.
Description
PhD Thesis
Keywords
Poverty -- Zimbabwe, Rural Poor -- Zimbabwe, Economic assistance -- Zimbabwe
Citation
Mago,S.Rural Microfinance and Poverty Alleviation in Zimbabwe: The Case of Masvingo District.Alice.University of Fort Hare.