Abstract
This paper examines the effect of the microcredit industry on female loan recipients in Mexico, in order to both recognize industry successes and highlight areas of improvement within the current model in an effort to enhance poverty alleviation efforts and better support female loan recipients. Born out of a desire to offer low-income individuals in developing nations with previously unattainable access to credit, the microfinance movement was born, and quickly gained popularity worldwide. When considering how to increase the effectiveness of microfinance institutions, studying the effects the microcredit industry has on female borrowers in Mexico as a case study proves beneficial. In the pages that follow, microfinance institutions throughout Mexico will be examined in order to 1) illustrate the current scope of the nation’s microfinance industry, 2) highlight areas of strengths and 3) identify areas for improvement. While microfinance institutions throughout Mexico have helped female loan recipients to see increased social benefits, current issues include high-interest rates, low financial literacy, and over-indebtedness, which all hinder Mexican female loan recipients' ability to expand their businesses, accumulate wealth, and break the poverty cycle. Finally, to address these issues, this paper will offer potential recommendations that could be adopted by Mexican microfinance institutions to enhance their effectiveness. Potential recommendations include mandating financial literacy programs, expanding individual loan opportunities, and increasing institutional efforts in urban areas where gender inequality levels are high.
Recommended Citation
Buckler Henry, Chloe I.
(2021)
"Enhancing the Effectiveness of Microcredit for Female Recipients in Mexico,"
Pepperdine Policy Review: Vol. 13, Article 2.
Available at:
https://digitalcommons.pepperdine.edu/ppr/vol13/iss1/2
