The idea was simple enough: By giving a very small loan to someone living in a poor country, you could help them expand a small business, which would lift their family out of poverty. When they pay back the loan, the money can be cycled to more borrowers, getting more families out of poverty.

How the microfinance can play the role to reduce poverty?

Microfinance allows poor people to protect, diversify, and increase their sources of income, the essential path out of poverty and hunger. Various studies of microfinance programs are largely supportive in reducing poverty.

How does financial inclusion reduce poverty?

(1). Here, financial inclusion is expected to be negatively associated with poverty rates because higher access to financial services by lower-income people generally helps to reduce poverty by facilitating consumption and engaging in economically productive activities.