Is Microfinance an Effective Strategy to Reach the Millenium Development Goals?

The United Nations' Millennium Development Goals (MDGs) have galvanized the development community with an urgent challenge to improve the welfare of the world's neediest people. This paper reviews the mounting body of evidence showing that the availability of financial services for poor households is a critical contextual factor with strong impact on the achievement of MDGs. Evidence from the millions of microfinance clients around the world demonstrates that access to financial services enables poor people to increase their household incomes, build assets, and reduce their vulnerability to the crises that are so much a part of their daily lives.