The Exclusion of Poor People in Microfinance

DOI

10.2991/978-94-6463-680-2_14How to use a DOI?

Keywords

Poverty; Microfinance; Financial Exclusion

Abstract

Microfinance has been acknowledged as a means of poverty alleviation. However, many poor people are still excluded from accessing it. This study examines the backdrops of this exclusion. The study employs a qualitative research methodology. The study focuses on Nusa Tenggara Timur (NTT) Province, Indonesia, where many low income people are excluded from microfinance services despite the presence of numerous and varied microfinance institutions (MFIs). From the perspectives of those people in poverty, the study found that accessing microfinance services was cumbersome. However, being poor and without access to MFIs did not mean people had no interest in microfinance; they were aware of the presence of MFIs, but procedural complexities, misinformation and a lack of confidence discouraged them from accessing microfinance. The study also found that, in recent times, MFIs have made efforts to expand their coverage, but these initiatives only increase the number of service units and members with limited increase for client coverage for those most in need. Existing procedural complexities continue to hinder availability, accessibility, and capacity-building efforts of MFIs. There are also various ambiguous government policies concerning poverty alleviation through microfinance. This study concludes that, within the case of NTT Province, the operational and institutional incongruities of MFIs have constrained its capacity to contribute to financial inclusion, subsequently poverty alleviation. The study highlights the fact that to make microfinance a viable tool of poverty alleviation, particular attention must be given to the mandate of the MFIs which must make poverty alleviation its key goal.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Marlyn Jeanne Christine
AU  - Peter Walters
AU  - M. Adil Khan
PY  - 2025
DA  - 2025/04/26
TI  - The Exclusion of Poor People in Microfinance
BT  - Proceedings of the Asia Pacific Sociological Association Conference  (APSA 2024)
PB  - Atlantis Press
SP  - 159
EP  - 175
SN  - 2667-128X
UR  - https://doi.org/10.2991/978-94-6463-680-2_14
DO  - 10.2991/978-94-6463-680-2_14
ID  - Christine2025
ER  -