Article Published In Vol.11 (May-June 2023)

The Role of the Microfinance Institution in Poverty Reduction

Author : Fitore Rrudhani

This paper presents research related microfinance institution in economy. This research examines the ideas underlying the effectiveness of microfinance organizations and their contribution to the modern economy. In addition, a number of issues related to the research problem are also reviewed. All scientific research has documented the importance of Microfinance Institutions for increasing the welfare of poor people, despite the fact that their offers are much more expensive than other financial institutions, these institutions have been very successful in reducing poverty and promoting economic development, especially in rural areas. A rather long history of innovative financial inclusion seems to have inherited microfinance. The term microfinance still seems to be a relatively new term, as the most widely used or practical term has been microcredit, which emphasizes the main focus of various financial institutions, included, although small savings have always been part of microcredit operations.

Keywords: Microfinance, Financial Institutions, Poverty reduction, Unemployment