What is the Impact of Microfinance on Poor People: A Systematic Review of Evidence from Sub-Saharan Africa

Assessing impact of microfinance in Sub-Saharan Africa
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This paper reviews empirical research on the impact of microfinance on the poor in Sub-Saharan Africa.

The paper studies evaluations of microfinance interventions across Sub-Saharan Africa and synthesizes evidence on impact of microfinance on incomes and non-financial outcomes of the poor. Based on the synthesis, the paper proposes a causal chain for the impact of microcredit and microsavings. Findings include:

  • Microcredit has mixed impact on incomes;
  • Microcredit and microsavings have positive impact on savings, but they increase clients’ expenditure and accumulation of assets;
  • Microfinance has positive impact on health, food security and nutrition;
  • Microfinance has positive impact on housing, and microcredit may empower women;
  • Microfinance may equip the poor to deal with external shocks;
  • MFIs need to focus on lending to poor entrepreneurs;
  • Microsavings may be a better model for poverty alleviation than microcredit.

The paper recommends specific measures for policy, research and practice.

About this Publication

By Stewart, R., van Rooyen, C., Dickson, K., Majoro, M., De Wet, T.