The financial system in a country translates to the economic development in the country. A reliable system with an efficient financial system is crucial for economic growth which fosters investments, facilitation of trade and risk diversification. Unfortunately, some states are still suffering from poverty, low income, and high unemployment rate. Low income individuals and small business entrepreneurs have challenges to access finances due to the qualifications required. There is need to lower the barriers and allow the people to obtain funds and empower themselves financially which will be a strategy to alleviate poverty. Under such conditions, microfinance institutions become an alternative source of finance to customers that lack access to traditional financial systems. However, microfinance institutions have faced numerous challenges in meeting their goals.
Microfinance sector in Africa has empowered many women financially compared to the past. Most of the women have an excellent payment record despite the challenges they encounter daily. Microfinance institutions have the potential to address the barriers of female empowerment to increase their independence, self-respect, pride and reduced friction with the friction. The institutions have further empowered people to invest in income generating activities that have improved their quality of life. The institutions are growing in dynamic levels despite the challenges such as the concentration of poverty in rural areas. They face the challenge of establishing strong institutions and managers to run them because adequate skills and knowledge in running the institutions is a critical requirement. https://themarketmogul.com/microfinance-africa/