Factors Influencing Sustainable Poverty Reduction: A Systematic Review of the Literature with a Microfinance Perspective

Salvador Fonseca, António Moreira and Jorge Mota ()
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Salvador Fonseca: Ministry of Planning and Finance of São Tomé and Príncipe, São Tome 168, Sao Tome and Principe
António Moreira: DEGEIT—Department of Economics, Management and Industrial Engineering and Tourism, Campus Universitário de Santiago, University of Aveiro, 3810-193 Aveiro, Portugal
Jorge Mota: DEGEIT—Department of Economics, Management and Industrial Engineering and Tourism, Campus Universitário de Santiago, University of Aveiro, 3810-193 Aveiro, Portugal

JRFM, 2024, vol. 17, issue 7, 1-18

Abstract: This research examined factors that help microfinance achieve sustained poverty reduction based on a systematic literature review (SLR). A search was conducted on the SCOPUS database up to December 2023. After analyzing hundreds of documents, a subset of 30 articles was subject to in-depth analysis, exploring factors and corresponding measurement indicators for sustainable poverty reduction in microfinance contexts. This article emphasizes that sustained poverty reduction is a gradual process requiring ongoing efforts from both Microfinance Institutions (MFIs) and governments. Two key success factors are empowering borrowers and ensuring the microfinance programs themselves are profitable. When implemented in an integrated and coordinated manner, these factors can empower individuals to escape poverty by fostering self-employment and income generation, ultimately reducing dependence on external support. Additionally, the study highlights the role of personality traits in influencing long-term entrepreneurial success. The findings provide valuable tools for MFIs and policymakers. MFIs gain a practical framework to guide their interventions towards sustained poverty reduction. Policymakers can leverage the identified factors and indicators when designing and implementing microfinance policies with a long-term focus on poverty alleviation. This study breaks new ground by presenting an operational framework that categorizes and integrates two critical factor groups: empowerment and beneficiary profitability. Furthermore, it links these factors to corresponding measurement indicators within a unified framework, enabling a more holistic assessment of poverty reduction efforts.

Keywords: poverty alleviation; poverty reduction; microcredit; microfinance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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