Impact of Microfinance Interventions on Poverty Alleviation in Rural Communities in Chad

Abstract

Purpose: The aim of the study was to assess the impact of microfinance interventions on poverty alleviation in rural communities in Chad. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Access to microfinance services, such as small loans and savings accounts, has empowered individuals in these communities to start or expand their own businesses, leading to increased income generation and economic self-sufficiency. Secondly, microfinance programs often prioritize women as beneficiaries, recognizing their role as key agents of change within their families and communities. Consequently, women who participate in microfinance initiatives have experienced enhanced decision-making power, improved socio-economic status, and better access to education and healthcare for themselves and their families. Additionally, microfinance interventions have been found to foster social capital and community cohesion by promoting group lending models and collective responsibility among borrowers. However, challenges remain, including issues of sustainability, scalability, and the need for complementary support services to address broader structural constraints. Implications to Theory, Practice and Policy: Social capital theory, financial inclusion theory and capability approach may be used to anchor future studies on assessing impact of microfinance interventions on poverty alleviation in rural communities in Chad. In practice, microfinance institutions (MFIs) should adopt a holistic approach that combines multiple microfinance services to address the diverse needs of rural communities. From a policy perspective, governments and policymakers should prioritize the development of supportive regulatory frameworks and conducive environments for microfinance institutions to thrive.