Contribution of Microfinance in Achieving Millennium Development Goals

Abstract

Evidences world over largely acknowledge the contribution of empowered women on education and health of the family. Since all over the world microfinance (MF) is mainly intervened through women, their economic empowerment should have a salubrious impact on poverty and social variables. The linkage of MF with Millennium Development Goals (MDGs) accepted by United Nations in 2010 further boosted this belief. However, literature on MF linkage with social transformations does not provide concrete evidence. In this article, with the help of a set of 92 cross-country pooled data for 9 years (2007–15), a linkage assessment of MF and MDGs related to poverty, that is, poverty headcount ratio and school enrolment at primary level of female and ratio of girls to boys in primary education, that is, Gender Parity Index, is attempted. With the help of pooled ordinary least square regression, three models were separately developed for the selected MDGs. While the findings do provide evidence about the participation of poor in MF and poverty reduction linkage, the education-related MDGs were less influenced by the MF programme. This prompts to suggest that overall capacity-building interventions at grass-roots level are also required along with MF for achieving MDGs.