Rethinking the Impact of Microfinance in Africa: ‘Business Change’ or Social Emancipation

Leo de Haan and Alfred Lakwo
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Leo de Haan: Institute of Social Studies – Erasmus University Rotterdam, The Hague.
Alfred Lakwo: Uganda Martyrs University – Institute of Ethics and Development Studies, Nkozi

The European Journal of Development Research, 2010, vol. 22, issue 4, 529-545

Abstract: This article questions received wisdom that the benefits of microfinance start with poverty reduction and are subsequently followed by social emancipation. Taking the case of Uganda and by using a consensual people-centred relevance test to assess the impact of microfinance on poverty alleviation, microfinance is shown not to improve the well-being of microfinance clients much, with only marginal well-being gains achieved by clients. However, a subsequent (gender) power relations analysis reveals that in spite of these marginal well-being gains, women clients achieved more emancipation. The article therefore calls for a rethinking of the microfinance outreach campaign in Africa, and of the controversy between the adoption of a business or welfarist approach to microfinance, suggesting that social emancipation should be pursued in its own right rather than waiting for poverty reduction to occur first.Cet article remet en question l’idée préconçue selon laquelle les bénéfices de la micro-finance consistent tout d’abord en une réduction de la pauvreté, suite à laquelle s’opère une émancipation sociale. En se basant sur le cas de l’Ouganda, et en utilisant un test de pertinence consensuel qui se focalise sur les individus afin d’évaluer l’impact de la micro-finance sur l’atténuation de la pauvreté, cet article montre que les projets de micro-finance n’améliorent pas énormément le bien-être des clients, leurs gains de bien-être étant marginaux. Cependant, une analyse plus récente des rapports de genre révèle que malgré la faiblesse des gains de bien-être, les femmes clientes de micro-finance parviennent à s’émanciper davantage que les femmes non-clientes. Cet article propose donc de réexaminer la campagne d’information sur le micro-crédit en Afrique ainsi que la controverse entre l’adoption d’une approche welfariste ou commerciale à la micro-finance, suggérant que l’émancipation sociale devrait être un objectif à part entière et non pas dépendant d’une réduction préalable de la pauvreté.

Date: 2010
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