FROM LOANS TO LIVELIHOOD: INVESTIGATING MICROFINANCE’S IMPACT ON BASIC NEEDS SATISFACTION

Abstract

This study was purposed to analyze the effect microfinance has on addressing the fundamental basic needs of food, clothes, shelter, health, and education of poor households. Access to them clearly shows one’s ability to attain the needs, thus financial assistance to households is uplifting. The reliability analysis showed the measurement constructs were consistent and suitable to assess the relationship of microfinance to basic needs fulfillment. The correlation analysis and regression analysis showed microfinance positively and significantly impacted the ability of households to spend on their needy expenditures. The results even showed microfinance more than just financial provision, it economically empowered the needy households to uplift their lives, spent on sustainable needs welfare such education and health. The findings have considerable practical significance for microfinance institutions which is to target economically active poor populations and develop well-designed tailored financial products and ancillary services that would optimally address the socio-economic needs of the borrowers. The same findings can be a basis for policy-makers to position microfinance as an instrument for poverty reduction and an enabler for sustainable development. The research demonstrates the ways microfinance positively impacts the overall welfare of households by helping satisfy the most basic needs and subsequently helping attain the economic and social empowerment of households.