Impact of Microfinance Institutions on Poverty Alleviation Among Women in Developing Countries: A Descriptive Analysis

Abstract

Microfinance institutions (MFIs) play a critical role in alleviating poverty among women in developing countries, addressing systemic financial exclusion through accessible, collateral-free loans. This descriptive study analyzes MFIs’ impact on women’s economic and social empowerment, focusing on income growth, asset creation, and social mobility in countries like Bangladesh, India, and Pakistan. Utilizing secondary data up to June 2024 from sources such as the World Bank, ILO, Grameen Bank, and India’s MoHUA, the study examines loan disbursement patterns, repayment rates, and challenges, including high interest rates (20–30%), digital literacy gaps, and rural-urban disparities. In India, government schemes like PM SVANidhi, Mudra Yojana, and Stand-Up India bolster MFI outcomes, supporting 46.2 lakh women micro-entrepreneurs. Case studies of women like Fatima Begum (Bangladesh) and Radha Devi (India) highlight tangible impacts, such as 20% income increases and enhanced household decision-making. Charts illustrate borrower demographics, loan utilization (50% for micro-enterprises), and scheme reach. Findings reveal that MFIs serve 112 million women globally, generating $150 per $100 loaned, though barriers like documentation and social constraints persist. The study proposes policy measures, including interest rate caps and digital training, to enhance gender-inclusive poverty alleviation, offering scalable insights for informal economies and sustainable development.