According to Professor Muhammed Yunus, Nobel Prize winner in 2006 and the founder of
the internationally acclaimed Grameen Bank in Bangladesh, microfinance is a viable solution
to poverty alleviation among the poorest people residing in rural areas. Microfinance
programs have led to poverty alleviation and empowerment of especially rural based women
of developing societies, as they enable the poor to manage their finances and cope with
unpredictable shocks and emergencies (Yunus, 2007).
This research evaluated the developmental impact of microfinance on poverty alleviation and
women empowerment. It assessed the impact of the existing microfinance programmes
among the members of the three microfinance Savings and Credit Associations (SCAs) in the
rural areas of the Caprivi region of Namibia. This study explored whether microfinance
programs have helped their members to minimize financial vulnerability through
diversification of income sources and accumulation of assets.
The research employed both qualitative and quantitative research designs. Data were collected
through different qualitative and quantitative techniques (in-depth individual interviews, faceto-face
interviews, questionnaire and questionnaire schedule).
Summary findings indicate that the SCAs has positively contributed to the socio-economic
improvement in the living standards (contribution to livelihood – increased income, enhanced
health, and food status), improved education/healthcare, women empowerment through micro
enterprise training and skill development. However, SCAs are still struggling with challenges,
such as lack of income, high default rates and unprofitable micro enterprises.
This research makes several recommendations, including: MFIs should concentrate on
women’s economic empowerment as their main aim, incentives should be provided to the
MFIs to encourage savings and investment amongst the poor, and if microfinance is to be
used as a promotional tool for credit and saving services for the poor, then the socio-economic
consequences of micro-credit lending have to be re-investigated, especially when they
negatively impact on poverty reduction.