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Experiencing microfinance: effects on poor women entrepreneurs' livelihood strategies.

Ukanwa, Irene; Anderson, Alistair

Authors

Irene Ukanwa

Alistair Anderson

Abstract

Purpose - To address the problem of why the poorest, most disadvantaged groups such as rural African women benefit less from microfinance. We focus on the perception and experiences of ordinary rural entrepreneurial women on microfinance, in a context of extreme poverty and where family responsibility and economic activities are closely intertwined. Design - To address the problem of why the poorest, most disadvantaged groups such as rural African women benefit less from microfinance. We focus on the perception and experiences of ordinary rural entrepreneurial women on microfinance, in a context of extreme poverty and where family responsibility and economic activities are closely intertwined. Findings - For poor entrepreneurial women, a livelihood for survival, putting food on the table and paying school fees are priorities, not business growth. They see microcredit as debt and a great risk that could lead to irreversible losses. Family responsibilities for basic consumption needs of the household can affect their ability to repay loans; perceived dangers of microcredit may outweigh potential benefits. Theoretical implications - Most of our theories, especially functionalist economic theory, do not take account of microfinance users experiences. Practical implications- Microfinance providers should be aware that the poorest perceive microcredit differently and should try to reduce the intimidating barriers. Instead of providing a means for the poor to alleviate poverty, or coping strategies to manage cash flows and risks, microfinance causes fear and anxiety by demanding high rate of return in a very short period time. Social implications - The very poorest, who should be the beneficiaries of microfinance, are less likely to be able to benefit. The condition of poverty creates different realities for those at the base of the pyramid. Originality and contribution - This study questions the neoliberal rationality assumptions upon which microfinance rests; the paper fills a gap in the literature about how the potential borrowers themselves living in deep-rooted poverty perceive and experience microfinance.

Journal Article Type Article
Publication Date Jun 18, 2018
Journal Journal of small business and enterprise development
Print ISSN 1462-6004
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 25
Issue 3
Pages 428-446
Institution Citation UKANWA, I., XIONG, L. and ANDERSON, A. 2018. Experiencing microfinance: effects on poor women entrepreneurs' livelihood strategies. Journal of small business and enterprise development [online], 25(3), pages 428-446. Available from: https://doi.org/10.1108/JSBED-02-2017-0043
DOI https://doi.org/10.1108/JSBED-02-2017-0043
Keywords Micro entrepreneurship; Microfinance; Poverty; Africa; Poor women entrepreneurs; Livelihood strategies

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