Can Microfinance Reduce Economic Insecurity and Poverty?

The paper suggests that, rather than through its narrow, direct financial impact, microfinance may prove to be more potent in reducing insecurity and poverty through its indirect, broader impact conducing to a more egalitarian initial endowment distribution that is necessary for the “take-off” of an equitable growth process. The paper begins by examining the distinctive roles of micro credit, micro savings, and micro insurance programs in dealing with poverty and insecurity, and highlights the complementariness that exists among these programs and how this complementariness can be used to overcome the weaknesses of the individual programs.