Is Product Diversification the Ultimate Quid Pro Quo for Gender sensitive Poverty Alleviation? Adverse Social Externalities from Combined Microfinance in Latin America and the Caribbean

Koen Rossel-Cambier

Abstract


Documented deficiencies in traditional social transfer mechanisms have led to the emergence of alternative methods for reducing poverty. While microcredit programmes have undoubtedly improved the lives of millions of poor households, they are also criticised for not being inclusive enough to reach out to the poor and their specific needs. This paper explores if product diversification has an effect on poverty outreach, in particular when combining micro-credit with savings and insurance. By reviewing cross-sectional evidence of 250 microfinance schemes in Latin America and the Caribbean, one can find positive effects of combined microfinance (CMF) on the breadth of outreach. Still, the contribution of CMF on the depth of poverty outreach is less evident, both viewed from an income-related and gender-sensitive lens. The findings suggest that the presence of savings is accompanied with a relatively lower participation of poor and female clients.


CITE AS:
Rossel-Cambier, K. (2013). Is Product Diversification the Ultimate Quid Pro Quo for Gender sensitive Poverty Alleviation? Adverse Social Externalities from Combined Microfinance in Latin America and the Caribbean. Iberoamerican Journal of Development Studies, 2 (2): 64-85

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DOI: https://doi.org/10.26754/ojs_ried/ijds.60

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