Abstract
Micro-finance involves the provision of small, unsecured loans to poor farmers and small-scale entrepreneurs who have no access to formal finance. The purpose is to enable the poor to obtain loans that will help them to escape poverty. Poverty is a real concern for Sub-Saharan Africa, and the reduction of poverty should be the primary objective of the majority of governments in this region. In Sub-Saharan Africa, the number of people living in extreme poverty rose from 290 million in 1990 to 414 million in 2013. In the World Bank’s Sub-Saharan Africa report, which was published in June 2015, it was projected that by 2015, 40% of the estimated 970 million people living on less than $1.25 a day would be from Sub-Saharan Africa. The micro-finance sector has received a large amount of donor and investor capital in the past decade, and it is important to establish whether this capital has achieved its objective. Therefore, this study assessed the impact of micro-finance on poverty reduction in 30 Sub-Saharan African countries for the 12-year-period from 2002 to 2013. Specifically, it investigated whether micro-finance has an impact on GDP per capita, which is used to determine both a country’s standard of living and its level of growth and productivity. The research also evaluated how micro-finance has influenced the participation of women in the region. This study used a panel data set to investigate the effects of micro-finance credit extension on poverty in Sub-Saharan Africa. The analysis found that micro-finance had a positive impact on GDP per capita and it reduced poverty in the sample countries.
M.Com.