Microfinance: Development Intervention or Just Another Bank?

This paper is based on a systematic review of evidence of the impact of microfinance on the lives of poor women, men and children in sub-Saharan Africa. It focuses specifically on longer-term non-financial outcomes related to health and nutrition and education. The paper contrasts microfinance's early days' initially refreshing and encouraging promises of a development initiative that empowers people to help themselves while 'paying for itself' with a more gloomy picture that derives from the synthesis results of our systematic review. It presents two simple models that show the pathways from microfinance to increased investment in improved health and education, contrasting theory with our synthesis results. Our discussion highlights that thinking through microfinance makes it necessary to thoroughly investigate both the theory behind interventions and the evidence for their impact. It raises the essential question: Is microfinance about providing banking services to the unbanked, or is microfinance a development intervention that concerns itself with the attainment of long-term sustainable responses to high levels of poverty? [ABSTRACT FROM AUTHOR]