Microfinance Institutions: A Thrust on the Trust of the Poor

Kishinchand Poornima Wasdani received Mitacs funding for research on how Microfinance Institutions (MFIs) exacerbate poverty, erode social networks, & contribute to gender exploitation.

Microfinance—a development tool, widely popularized by global development institutions, policymakers, and academic researchers is fronting a dichotomy between building a future for the poor or building a future from the poor. While a growing number of scholars have identified the detrimental outcomes of microfinance, this stream of research has been uncoordinated so far as it is scattered across different fields, including anthropology, economics, gender studies, geography, management, public policy, and sociology. In this synthesis, the paper will thematically review three important strands of Microfinance Institution (MFI) impacts: poverty alleviation or aggression, social enhancement or erosion, and gender empowerment or exploitation, to make a theoretical conceptualization of the consequences that microfinance poses on some of the world’s poorest population. The research identifies the insufficiency of financial support in the absence of capability-building programs to render a sustainable solution to the social evils of poverty and deprivation.