Authors : Idowu A. Chiazor, Matthew E. Egharevba and Mercy I. Ozoya
Abstract: In developing regions such as Africa and Latin America, the income disparity between the rich and the poor is very wide. No doubt, Inequality is on the rise in recent years and, following the turn of the global financial crises, so is the poverty index within the developing nations of the world. With advancements in technology, globalization and changing social norms, the complex nature of income inequality and poverty today has led economists and sociologists alike to become more critical of this growing phenomenon. Despite, the extensive literature that exists on this subject matter, there seems to be conflicting opinions as to ‘the best’ solution to address this increase in inequality in the developing world. The one thing experts do agree on, however, is that even if there may be other impersonal causes for the rise in inequality and poverty, governments’ adoption of microfinance strategies on a macro scale may be one of the most effective ways to curb this increase. The aim of this study is to highlight the vast potential that microfinance has as a tool for poverty alleviation. This study begins by briefly presenting some of the main causes for inequality and poverty in the developing world and how these factors are measured. A detailed analysis on the social consequences of inequality is then presented as well as the role of microfinance in poverty alleviation in developing nations. The study concludes by highlighting the major challenges that governments face in adopting microfinance strategies and the best ways to mitigate these challenges. It is established that Microfinance if well managed is a powerful tool for lifting the poor out of poverty or turning their fortunes around and thereby help bridge the frightening gap between the rich and the poor in developing countries that are so rich, yet the majority of their citizens are poor.
Idowu A. Chiazor, Matthew E. Egharevba and Mercy I. Ozoya, 2016. Widening Inequality and Poverty in the Developing World-Micro-Financing as a Viable Solution. The Social Sciences, 11: 3286-3293.