Africa still needs Microfinance

Image by transaid images via FlickrIn the Harvard International Review, Eric Thurman argues for a continued focus on microfinance while others see a need for more emphasis on the SME space:

It is time to maximize the abundant resources of Africa, especially the human assets. Microfinance is an excellent tool to achieve this goal. A close look at the realities of Africa reveals factors which must be taken into consideration as part of any effort in development. Economic patterns here are different from other parts of the world. First, few people have wage-paying jobs. Self-employment dominates the labor force. Also, people are more dispersed than in most other parts of the world. In a situation where the population is geographically scattered and self-employment is the norm, microfinance is a proven, practical way to boost personal income. Large public works projects or signs of industrial development are rare. Foreign direct investment and job creation in any form should be encouraged wherever possible, but no one is suggesting that these will produce large scale employment for Africans anytime soon.