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Microfinance: A review of the literature - development strategy recommendations for improving low income and poverty reduction in Ghana

Author Affiliations

  • 1Department of Economics, Mangalore University, Karnataka, India
  • 2Department of Economics, Mangalore University, Karnataka, India

Int. Res. J. Social Sci., Volume 7, Issue (4), Pages 6-20, April,14 (2018)


"Microfinance" has been based on several propositions, recently. We examine the literature on microfinance and discuss concepts such as financialization, financial inclusion, neoliberalism, globalization and commercialization, and possible development implications on microfinance clients in Ghana-most of whom "do something not to remain idle". While pundits grapple with "microfinance", as a development tool, it becomes clear that today's challenges, often of high client indebtedness, require a new approach 'beyond mere inclusion' and/or commercialization or 'standalone' operations. We argue for capabilities aspect based on development partnership as key component of responsible financing, necessary to prop up the development proposition of microfinance operations for a win-win outcome. This means broadening the approach: recognizing and facilitating the active participation from identifiable key social institution such as the government (at the district level), traditional rulers, NGOs and the environment itself as indispensable collaborators for impactful microfinance service delivery. We propose a new definition of "microfinance" and conclude in agreement with Karnani (2009) who suggests that microfinance is not the solution but "jobs are the solution".


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