University of New Hampshire
Economics and Philosophy
Mentor: Dr. Michael Swack, UNH Carsey Institute
Impact of Microfinance on Clients of MFIs as Perceived by Latin American Participants in the Programs of ACCION USA in Boston
Microfinance originated as a tool for eradicating poverty in the developing world. Several institutions are employing microfinance to combat poverty in the United States (US), but some scholars claim that microfinance is ineffective against poverty in the US. Despite the skeptical claims, institutions like ACCION USA report that microfinance has positively impacted the lives of many people in the US, which confirms that it is an effective tool for combating poverty. The current research on the impact of Microfinance Institutions (MFIs) has rendered mixed results leading to the conclusion that the impact is hard to measure. Yet, given the attention that microfinance has gained in the past few years it becomes increasingly more important to determine whether or not microfinance is having an impact on the participants, since this will give evidence to whether or not microfinance is helping to eradicate poverty in the US. Thus far, previous studies of microfinance impact have focused on positivist analyses of the financial performance of clients, neglecting a qualitative assessment of clients individually. Since the clients of MFIs are the key to understanding the impact of microfinance services, this research aims to explain how the Latin American clients of ACCION USA perceive themselves to be impacted by the microfinance services they have received from ACCION USA. The efficiency of microfinance can encourage higher donations from private individuals and government agencies, but if microfinance is not helpful to combat poverty, than millions of dollars are being wasted. As a result, by explaining how the impact of MFIs is perceived from the viewpoint of the clients, this research will provide valuable information so that all parties interested in microfinance – such as potential clients, donors, MFIs and government agencies – may make better informed decisions with regards to microfinance.