Microfinance as a Tool for Poverty Reduction: A Study in Mexico

Abstract

The objective of this study is to evaluate the impact of microfinance on the low-income people. The research was carried out in Mexico, a country with well-developed microfinance sector. The results have shown that microfinance has got an impact on improvement in the social and financial situation of the poor, female clients are particularly involved in microfinance sector. The higher income of clients has not caused higher expenditure on their basic needs and they used money for future and as additional money for education. The microfinance impact assessment and its results assumed that people, primarily women, prefer an improvement of social situation in their families and for future generations. Based on these findings we consider microfinance as an effective tool for breaking the vicious circles of the poverty worldwide. Moreover, microcredit has been capable of increasing self-employments in rural parts in Mexico. It is evident that microfinance leads to develop small entrepreneurships. DOI: 10.5901/mjss.2016.v7n5p18