Microfinance as an enabler of transformative economic development: The Zimbabwean context

Abstract

Many countries consider microfinance institutions as a tool for poverty alleviation. This is common in developing and transitional countries such as Zimbabwe, which is experiencing political and economic instability. Zimbabwe is a good example of a country where Microfinance Institutions (MFIs) have a potential to transform the lives of its citizens by providing working capital. Zimbabwe, like many countries in the Sub-Saharan region, has a high unemployment rate of approximately 90%, justifying the emergence of the informal sector as a survival strategy. Although MFIs have been regarded as an economic and transformation enabler by many countries, it remains unclear whether it delivers its promises. This paper explores the implication of microfinance in Zimbabwe, evaluating its effect on transforming the lives of the people and promoting economic development; microfinance intervention improved the access to credit for microfinance clients. The study was conducted using a qualitative research method and semi-structured interviews were used to collect data from 30 farmers, who were purposively sampled from a total of 50 members of the Simunye Burial Society. The study revealed that there is a nexus between micro-credit and improved livelihood of poultry farmers and their households.