Poverty is a problem in many developing countries. In Kenya, efforts have been made to end poverty. Poverty in Kenya can be seen in many forms because it exists in both income and non-income dimensions. The country con sis it of the rich, the middle class and the poor who live below the poverty line. This article explores the role of micro-finance on poverty alleviation in Kenya.
Micro-finance is developing in almost all parts of Kenya and it is becoming one of the major tools of poverty reduction in the country. Micro-finance is an important aspect, especially when it comes to women empowerment. Many women are getting out of poverty because of micro-finance institutions.
Provision of loans to small businesses
Equity bank in Kenya provides loan services to small businesses to run their businesses. This influences poverty reduction positively because loan provision by equity banks provides some individuals with start-up capital for their businesses.
This means that micro-finance institutions are doing great in terms of financing small businesses. Because of this, entrepreneurial development is improving in the country and many businesses now operate in the country.
The loans provided by microfinance institutions to small businesses lead to improved revenues, more profits for their businesses and improved ability to cater to their families’ needs. Because of this, the number of households living below the poverty line is reducing in the country.
Saving opportunities
Micro-finance institutions in Kenya enables businesses and individuals to save money and use them when they are in need. Because of this, many Kenyans are empowered since the banks offer them an opportunity to save their money so they don’t have to spend everything.
This has helped greatly in poverty reduction in most parts of the country. Some individuals can save money until they accumulate and use it to start something big that changes their lives for better.
The saving accounts offered to Kenyan citizens and small businesses allow growing. Most Kenyans open personal savings accounts and save money.
Saving money is one way of making more money and many Kenyans have realized the importance of opening savings accounts. Because of this, many people have managed to escape extreme poverty. Awareness of savings and the importance of savings has led to increased knowledge of the locals about micro-finance.
Business support services
Most micro-finance institutions in Kenya offer advisory services to small businesses. Because of this, businesses are growing and improving their figures in terms of profits. Businesses are empowered on the best investment opportunities that they can take advantage of. Businesses that take that advice seriously are getting huge returns.
Besides, equity bank offers support to small businesses in Kenya in terms of monitoring their activities, field services, and ensuring effective management of businesses.
Because of this, businesses are making more profits out of the support provided by most micro-finance institutions in Kenya. Business support services also lead to increased revenues and increased numbers of employed persons in the country thus reduced the poverty level.
Networking opportunities
Networking opportunities expose small businesses in Kenya to influencers who take their businesses to higher levels. Because of this, small businesses can learn new business practices and more income-generating opportunities. This, in turn, helps in poverty reduction in the country. Providing networking opportunities, therefore, becomes an important role of micro-finance on poverty alleviation in Kenya.
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