Institute for Social and Economic Change

Established in 1972 by Professor V K R V Rao, ISEC is an All-India Institute for Interdisciplinary Research and Training in the Social Sciences

Micro-Finance and Poverty Alleviation Issues Relating to NGO Programmes in South India – isec

Micro-Finance and Poverty Alleviation Issues Relating to NGO Programmes in South India

Abstract

This paper examines the contribution of NGO micro-finance programmes to poverty alleviation with the help of evidence on group formation and savings and credit operations. The paper suggests that the micro-finance programmes often benefit the non-poor, savings amounts are not high enough to reduce vulnerability within member households and loan amounts are not large enough to make a dent on poverty. Many member households do not have significant access to credit. The claim that micro-finance programmes are answer to poverty alleviation is not, therefore, empirically substantiated. This suggests that in addition to micro-finance other interventions such as public expenditure, credit plus activities etc., have to be made.

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