According to a report released by the Microcredit Summit Campaign, a program of the U.S.-based advocacy group RESULTS Educational Fund, nearly 9 million Indian households involved in microfinance — including approximately 45 million family members, on net — rose above the $1.25 a day threshold between 1990 and 2010.
This news comes during a difficult time for the sector in India and elsewhere. Microfinance institutions offer loans that can start at $50 and other financial services that enable the poor to start or expand small businesses, according to Microcredit Summit Campaign.
A survey of more than 15,000 Indian households carried out by the India Development Foundation (IDF) found that a dramatic number of families moved out of poverty between 1990 and 2010.[ Also Read: Film on Yunus’s Grameen America in Theaters ]
It is stated that the microfinance sector in India barely existed before 1998. The survey was largely completed, however, before the microfinance crisis in Andhra Pradesh erupted at the end of 2010 greatly reducing the number of households served.[ Also Read: 10 Simple Reasons I Love My Country India ]
“This report is good news, coming out seven months after a similar survey showed significant progress in Bangladesh,” said Sam Daley-Harris, director of the Microcredit Summit Campaign.
Globally, microfinance has also been faced with criticism from the academic community. A series of randomized control trials (RCTs) have questioned the effectiveness of microfinance as a poverty reduction tool. But these studies, touted for their rigor, have been met with questions of their own, says Microcredit Summit Campaign.
“Two of the problems I have with the RCTs that have been done to date are that they haven’t studied programs that are known for their deep commitment to ending poverty, and they typically cover a 12- to 18-month period, which is too short a time for real change to take place,” said Chris Dunford, president of Freedom from Hunger.[ Also Read: Celebs Join Hands to Combat Hunger in the U.S. ]
These surveys, IPOs in India and Mexico, and RCTs will be among the issues discussed at the Global Microcredit Summit to be held November 14-17, 2011 in Valladolid Spain.
The work on these surveys is part of the Microcredit Summit Campaign commitment to fulfilling the United Nations Millennium Development Goal of cutting poverty in half by 2015. It was announced today, August 16.
Photo courtesy: Microcredit Summit Campaign