Provide a critical assessment on the merit of the claim that Essay

Provide a critical assessment on the merit of the claim that microfinance has a poverty reduction and gender impact - Essay Example The governments across the world have been instrumental in alleviating poverty. They have introduced various measures that are aimed at enabling people to create employment. However, there are other challenges that are dragging the success of these interventions. This paper will analyze the merit of claim that microfinance has a poverty reduction and gender impact (Wright-Revolledo, Greeley, Brody, & Copestake 2005). Over the past five decades, the financial institutions have become very critical in financing people to initiate various projects that are very significant in alleviating poverty. However, majority of the people in developing countries do not have collaterals to enable them to get access these funds (Shaw 2004). For instance, in Asia and Africa, many governments are yet to establish effective structures to enable people to have the required collaterals in order to get access to loans. This has made it hard for the banks and other financial institutions to reach the common citizen who is highly affected by the poverty levels. Agriculture is one of the sectors that are associated with poor people in these regions (HamzeÃŒ  2001). Many poor farmers rely on rain fed agriculture in order to grow their food. This is because they do not have collaterals such as title deeds to enable them get access to the funds. In addition, banks are not willing to give them loans because the sector is v ulnerable especially from the vagaries of nature such as drought, floods, etc. This has exposed these people to extreme poverty. However, microfinance institutions are able to offer poor people with loans that enable them to start small and medium enterprises, an aspect that has contributed immensely in reducing the poverty levels. Because majority of these people lacks the skills and experience on how to handle such enterprises, the microfinance institutions have even gone ahead to train the