Microfinance Institutions as a Vehicle for Poverty Eradication in Developing Countries: Evidence from the East African Community Member States

  • Joseph Dushime Kenyatta University School of Business, Kenya
  • Immaculate Nakalembe Kenyatta University School of Business, Kenya
  • Yar Makuei Kenyatta University School of Business, Kenya
  • Albert Kwitonda Kenyatta University School of Business, Kenya
  • Samuel Hakizimana Kenyatta University School of Business, Kenya
  • Stephen Muathe Kenyatta University School of Business, Kenya
Keywords: Financial Inclusion, Microfinance Institutions (MFIs), Poverty eradication, developing countries, East African Community (EAC)

Abstract

This paper focuses on examining the link that exists between microfinance institutions (MFIs) and poverty eradication efforts in developing countries, specifically focusing on the East African member states of Burundi, Democratic Republic of Congo (DRC), Kenya, Rwanda, South Sudan, Tanzania, and Uganda. The study was driven by the varying interpretations, debates, and opposing opinions in literature on the effects of MFIs on poverty eradication in developing economies, particularly in the East African Community (EAC). The study used a depth literature search using secondary data on the role of MFIs in poverty eradication in the EAC context. The results pointed out that despite the challenges such as high transaction rates, limited funding and others, microfinance credit has played a significant role in poverty eradication among poor/low-income families in the EAC Member States. Therefore, the study recommends that governments of the EAC Member States should increase government support, and conducive working environments should be provided to ensure microfinance institutions reach as many less privileged individuals as possible so as to raise their economic status.

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Published
2022-07-31
How to Cite
Dushime, J., Nakalembe, I., Makuei, Y., Kwitonda, A., Hakizimana, S., & Muathe, S. (2022). Microfinance Institutions as a Vehicle for Poverty Eradication in Developing Countries: Evidence from the East African Community Member States. European Scientific Journal, ESJ, 18(22), 207. https://doi.org/10.19044/esj.2022.v18n22p207
Section
ESJ Social Sciences