Microfinancial system and sustainable development: Are they compatible?

Microfinancial system and sustainable development: Are they compatible?

EDGARDO SICA AND GIUSEPPINA TESTA, UNIVERSITY OF FOGGIA, ITALY
Abstract: In recent years, millions of poor people worldwide have benefited from microfinance activities, such as microcredit, microsaving and microinsurance, making these financial services a key-tool for development of many developing countries. At the same time, the concept of sustainable development has taken on an increasing importance in the debate about economic growth and environment. The present study tries to explore the relationship between microfinance and sustainable development in developing areas focusing mainly on environmental sustainability. Our analysis seems to suggest the full compatibility between microfinance institutions and a sustainable development path at local level, on condition that these institutions implement policies aiming to make compatible the loans they provide with the environment and that they encourage the diffusion of environmental awareness across borrowers.
Keywords: Microfinance, Microcredit, Sustainable development, Environment, Developing countries

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