The Importance of Microfinance Institutions in the Development of Developing Countries

Osamah Ahmed AL-Maamari; P Vedava; Noufal Alrefaei

doi:10.34293/economics.v10i4.5147

Osamah Ahmed AL-Maamari Research Scholar, Department of Commerce, Mangalore University, Mangaluru, Karnataka, India https://orcid.org/0000-0002-5022-9597
P Vedava Associate Professor, Department of Commerce, Mangalore University, Mangaluru, Karnataka, India
Noufal Alrefaei Research Scholar, Department of Social Work, Mangalore University, Mangaluru, Karnataka, India https://orcid.org/0000-0002-4164-0368

DOI: https://doi.org/10.34293/economics.v10i4.5147

Keywords: Microfinance, Sustainable Development, Third World Countries, Poverty Reduction, Financial Inclusion, Women Empowerment, Entrepreneurship

Abstract

This study intends to provide light on the favourable benefits of microfinance on a variety of social and economic outcomes, such as poverty reduction, job creation, economic independence for women, and long-term societal advancement. By enhancing the availability of financial and non-financial services to MSEs, we can increase their impact on the national economy. Microcredit programmes administered by non-governmental organisations (NGOs) have effectively reduced poverty in developing nations by providing loans with low-interest rates and minimal requirements for collateral. This study’s methodology is based on a discussion and a review of prior research. However, the study’s primary finding demonstrates that microfinance is critically essential. However, it confronts other obstacles that could restrict its contribution to long-term growth and monetary inclusion.