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Journal for Studies in Management and Planning

Available at https://pen2print.org/index.php/jsmap/

ISSN: 2395-0463

Volume 04 Issue 11

November 2018

Available online: https://pen2print.org/index.php/jsmap/ P a g e | 35

The Impacts of Microfinance on Poverty Reduction in Kenema

City, Sierra Leone

ABDUL KARIM KOROMA

1Business and Management Studies Department, Eastern Polytechnic, Private Mail Bag,

Kenema, Sierra Leone.

Abstract

Poverty reduction has been a major concern for successive governments in Sierra Leone over

the years because it is believed to be the universally accepted way of achieving economic

growth in the country. The intended purpose is to raise the living standards of the people and

improve upon their quality of life. As a result, different economic policy reforms are pursued

to achieve that, but the impact has not been felt by all, especially those in the rural areas. The

study reveals how microfinance impact poverty reduction in the study area, to identify

problems microfinance institution encounter in loan recovery and proffer solutions to curbs

the problems microfinance institutions faced. Data were collected primarily from field survey

through questionnaires administration. The results of the study also show that microfinance

institutions have empowered women economically, socially, psychologically and politically

as majority of microfinance beneficiaries are women. The result of this study also discusses

the challenges confronting the efficient functioning of microfinance activities. On the basis of

findings of the study, some recommendations have been given to improve the effectiveness

and to remove the various problems associated with the design and implementation of loan

recovery.

Keywords: Poverty, Microfinance, Poverty Reduction, Microcredit, Threshold

1. Introduction

Many people in developing countries neither have their own bank accounts nor are

they able to take out loans, transfer money or insure their families against risks such

as illness, accident or death. In most cases, access to these financial services that are

so central to sustainable development are either denied or made very difficult.

Consequently, people frequently have no choice but to resort to local money lenders

who charge higher rates of interest. Microfinance is a phenomenon that reflects the

provision of both credit and savings services to low income people. This provision of

funds in form of credit and microloans empowers the poor to engage in productive

economic activities which can help boost their income level and thus, alleviate

poverty in the economy