Paper

Microfinance as a Vehicle for Educating the Poor

Highlighting the importance of integrating financial and non-financial services
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This paper examines the importance of combining financial and non-financial services for the poor. It advocates group based microfinance and the unified service delivery method as effective means of ensuring provision of coordinated services.

Very poor people need more than microfinance to address their poverty. They need a coordinated combination of microfinance and other development services to improve business, income and assets, health, nutrition, family planning, education of children and social support networks. The paper states that:

  • Microfinance practitioners recognize the need for non-financial services, but are concerned that offering these services would be unsustainable;
  • Therefore, MFIs prefer to focus only on meeting their clients’ financial needs;
  • Group based microfinance provides a good opportunity to provide low cost education services for the poor;
  • Village banking and related delivery systems bring large groups of poor clients together in regular meetings;
  • They can be used to provide non-formal adult education on a variety of topics.

The paper compares three types of service delivery, namely linked, parallel and unified service delivery. It identifies unified delivery of integrated services as the option most likely to be sustainable in the long term.

About this Publication

By Dunford, C.
Published