Abstract
The purpose of this paper is to establish the connection between microfinance and the Global Financial Crisis (GFC). Its ultimate aim is to seek for a sustainable solution for the poor people in Africa. Its qualitative research methodology and an explorative design allowed the researcher flexibility to interact with secondary sources of data. The global financial markets noted volatility from the mid-2007 to date. The crisis led to serious short and long-term impacts that include rising unemployment rates, loss of income, closure of enterprises and increased poverty. African economies need to be placed on a more stable and equitable growth trajectory by correcting the inherent imbalances in the financial system so as to generate socially and economically efficient outcomes. Microfinance gained popularity in the 1970s when Yunus identified it as a developmental and poverty alleviation intervention. Findings show that microfinance could be a sustainable alternative for the poor since it managed to pull through the GFC. This paper argues for a sustainable and inclusive microfinance that will contribute towards keeping Africa on a growth path. Key words: Microfinance, microcredit, global financial crisis, economic growth, microfinance approach, sustainability, financial inclusion.
Highlights
The Global Financial Crisis (GFC) and its aftermath meant the world faces the prospect of a prolonged increase in unemployment, loss of income, foreclosures and closure of enterprises
The African economies and their financial sectors are linked to the international financial market that was shaken by the GFC (Ndibe et al 2013)
It was based on newspaper articles, statistics from reports released by organizations such as International Labour Organisation (ILO), International Monetary Fund, World Bank, Overseas Development Institute (ODI), and African Development Bank (AfDB), United Nations (UN), African Union Commission etc
Summary
The Global Financial Crisis (GFC) and its aftermath meant the world faces the prospect of a prolonged increase in unemployment, loss of income, foreclosures and closure of enterprises. The African economies and their financial sectors are linked to the international financial market that was shaken by the GFC (Ndibe et al 2013). There is need to put African economies on a more stable and equitable growth trajectory. Both socially and economically efficient outcomes (Allen and Maghimbi, 2009) need to be generated by the financial system. Despite the ups and downs caused by the GFC, microfinance remains important especially in the microenterprises sector (MicroRate, 2012)
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