David Bote and Stephen Mago

DOI: https://doi.org/10.6000/1929-7092.2019.08.161

Published: 27 December 2019

Abstract: Poverty reduction is one the efforts poised towards the achievement of Sustainable Development Goals (SDGs). The Eastern Cape Province is one of South Africa provinces with the highest rate of adult poverty (67.3%) coming after the Limpopo province which registers 67.5%. The objectives of the paper are to; i) identify and analyse the challenges of using microcredit as a poverty reduction tool and ii) propose strategies that could be used to enhance the efficacy of microcredit as a poverty reduction tool. A survey of available literature was adopted in this study to achieve the objectives. We used the ‘traditional or narrative literature review’ methodology to gather relevant information. The paper suggests strategies that can be used to enhance the impact of microcredit programmes on poverty reduction in the province. We have revealed the importance of microcredit as a poverty reduction tool. We also revealed that it has been in existence for a long time in the province but has not adequately contributed on poverty reduction across the province. The principal findings outline some of the main challenges associated with microcredit and the results suggest that removing key challenges can improve the scale and impact of microcredit.

Keywords: Microcredit, poverty, poverty reduction, microfinance, Sustainable Development Goals.

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