Microfinance believed to be connected to poverty alleviation in India and Bangladesh

"Nearly 45 million people saw their incomes rise above US$1 .25 (INR 56) per day in the two decades ending 2010. A report based on a survey of more than 15,000 Indian households by the India Development Foundation finds that: ‘There is significant correlation in both India and Bangladesh between the presence of microfinance and the movement out of poverty in the rural areas of both the countries, especially in the early years.’”

Implications from IFTF:

It is of course always important to remember that correlation does not mean causation. Many other reports state that microfinance does not have any effect on bringing rural communities out of poverty, as they do not provide enough employment opportunities. Microfinance loans tend so small that they only employ the person who receives the loan, at the same time many microfinance organizations have become predatory and create a spiral of debt.