Impact of Microfinance on Agriculture Sector Development, SMEs and Small Entrepreneurs: A Literature Review

Abstract

Introduction: This research paper reviewed the impact of microfinance on agriculture sector development and small enterprises to reveal the effectiveness of microcredit on small businesses and farmers' lives. In recent years, the progress and outreach of microfinance have been magnificent, and now it is considered a new approach and way to promote the agriculture sector and small enterprises. The efficiency of microfinance institutions has increased over the past decade, and they have significantly increased their outreach, products, and loan sizes, which helps to promote loan productivity and benefit borrowers.

Methodology: In this study, we analyzed and study the impact of microfinance on agribusinesses and small enterprises by reviewing the different research articles and books on microfinance to realize the its importance and its impacts on different business communities.

Findings: Finding disclosed that microfinance is an effective tool to minimize poverty and educate entrepreneurs about the promotion and management of their new and existing businesses. Since the 1990s, the microfinance sector has been rapidly growing day by day, and the success stories of entrepreneurs show the positive role of microfinance in building a financially stable and better society by uplifting the living standards of poor entrepreneurs and small farmers.

Future Direction/Implications: In this study we found through the research findings that microfinance has a positive and significant impact on the growth of agriculture sector development and small enterprises. Governments should facilitate the microfinance institutions by providing the financial and logistic support to increase their outreach to benefits the maximum farming community, as well as SMEs and small entrepreneurs.