Effective strategies for reaching the poor

This article provides some practical insights into the way in which a microfinance institution (MFI) can structure its support so as to maximise its chances of helping the poorest raise their living standards. The debates concerning the ability of microfinance to empower women and alleviate poverty, particularly for the poorest, are acknowledged but not discussed in detail. Drawing on the experience of the Tshomisano Credit Project (TCP) of the Small Enterprise Foundation (SEF), the article challenges the assumption that success can be judged by clients’ repeated loan‐taking and institutional performance, and stresses the need to understand the impact of credit and savings on people's livelihoods. The article details three areas which the SEF views as critical for successfully alleviating poverty through microfinance: identifying the poorest and designing a project which actively encourages their participation; drawing on SEF members’ resources and defining the SEF's role as support through facilitation; and incorporating a learning system which constantly questions the impact of the programme and actively differentiates between impacts on people in different contexts.

Notes

Development Adviser, Development Department, Small Enterprise Foundation, Tzaneen, South Africa.