Micro Finance and Women Empowerment in Sierra Leone - Dissertation Example

Download file to see previous pages The concept of microfinancing was developed in the mid 19th Century when Lysander Spooner developed a paper listing the advantages of small credits to farmers and business people as a means of alleviating poverty (Eyben, 2008). Microfinance as it is understood today can be accredited to the Works of Muhammad Yunus, a Professor from Chittagong University in Bangladesh. In 1974, Yunus lent some money to a group of poor villagers in order to enable them to set up a business with which to sustain their families. He then began to find ways of addressing the lack of credit access to the poor through action research (De Haan, & Lakwo, 2010; Hulme & Arun, 2008). In 1976, Yunus together with his students created a credit program intended to serve the poor. They worked together with rural banks whereby the banks provided the money while the program was responsible for disbursing and recovering the loans from the people. In 1983, Yunus and his associates created the Grameen Bank and soon the microfinance program spread to all corners of the country (Johnson, 1998; Rosenberg, 2009).

Soon, interest in microfinance gathered momentum throughout Bangladesh as well as other Asian countries such as India, Pakistan, and Indonesia, and studies have explored both the merits and weaknesses of its application. There emerged varying perceptions of how effectively microfinance has actually impacted the broader economy or society. Studies on microcredit in Bangladesh were conducted by Aslanbeigui, Oakes, and Uddin (2010), and Faridi (2011). Authors of studies on India include Amutha (2011), Swain and Wallentin (2009), and Basargekar (2009 & 2010); on Pakistan, Alam et al. (2010) and Muhammad (2010); and Indonesia, Nugroho and Eko (2009), Seibel (2008), and Rosengard (2007). These works shall be discussed in greater detail in the literature review in the next chapter.

Over time, the success of microfinance in Asia encouraged other countries of the world to pick up the practice and it was not long before microfinance was introduced in the African continent (De Haan & Lakwo, 2010, Duran 2010) and in South America (Maclean 2010). Marconi and Mosley (2005) have noted that in the continent where most countries have been ravaged by war and famine, microfinance has created many chances that would otherwise have been impossible. It bears to be examined, however, whether the chances thus provided have yielded significant results that would justify the high-profile endorsements and programs instituted in favor of promoting microfinance and microcredit as a vehicle for poverty alleviation and the social upliftment of women. ...Download file to see next pages Read More