These are certainly important measures of success. But they only tell part of the story.
Recent research published in the Journal of Management Studies, Why Microfinance Works – Even When It Doesn’t Create Entrepreneurs, challenges the idea that the value of microfinance should be judged by whether every borrower becomes a successful entrepreneur. Based on extensive fieldwork with the Small Enterprise Foundation in South Africa, the research offers a broader view of what access to finance can mean for people living with financial uncertainty.
For people living on low incomes, financial pressures rarely arrive one at a time. An unexpected expense, a poor harvest, illness or a period without work can quickly put pressure on an already stretched household budget.
The research found that while some borrowers use loans to grow businesses, others use the money to manage these everyday pressures — whether that’s covering essential household costs, supporting relatives or navigating a difficult period.
From a traditional microfinance perspective, these might be considered ‘non-productive’ uses of credit. But that misses an important point: being able to manage financial uncertainty is valuable in itself.
Annie Khosa knows this first-hand. Before joining MicroLoan Foundation, she had to sell her home to pay for food and her children’s school fees. It was a difficult decision, but their education came first.
When Annie joined MicroLoan Foundation in 2010, she used her loan to invest in farming, with a longer-term goal of buying land and building a new home. Over the years, she and her husband diversified their income through farming, poultry, a grocery stall and an ice-lolly business. Today, Annie has rebuilt her home, supported all her children through school and created a more secure future for her family.
Her story illustrates an important distinction: the value of finance isn’t always in what the money is spent on initially, but in the opportunities it can create.
Reliable access to finance can give households more options when something goes wrong. It can help them avoid selling productive assets, take advantage of opportunities when they arise, and gradually build back financial security.
This is something we see across MicroLoan Foundation’s operations.
For many of the women we support, running a business is a route towards greater financial independence. But the benefits of increased income don’t stop with the business itself.
Last year, 84% of our clients said they had better food security than before they joined.
Women tell us about being able to save for the future, invest in their homes, support relatives, deal with unexpected expenses and make plans with greater confidence. These may not always look like traditional measures of business success, but they can make a profound difference to a family’s stability and prospects.
97% of our clients in Zambia reported improved resilience to face emergencies last year.
And resilience matters particularly when communities face major challenges. Drought, economic shocks and rising costs can quickly undermine household incomes. Having access to financial resources can provide a vital buffer, helping families navigate difficult periods and recover when circumstances improve.
There is another dimension to financial inclusion that can be harder to measure: agency.
In 2025, 83% of our clients reported increased decision-making power.
Having access to financial resources can give women greater control over decisions affecting their own lives and families. It can increase confidence, strengthen their ability to plan for the future and give them more options when faced with difficult choices.
For women living in poverty, that sense of control can be just as important as the income generated by a business.
The research also highlights the role of relationships and community. Trust, social responsibility, peer support and flexibility can all contribute to successful borrowing and repayment. Financial inclusion is about more than simply providing capital. It’s about creating access to useful financial tools within an environment that recognises the realities of people’s lives.
None of this diminishes the importance of enterprise development. Helping women start and grow businesses remains central to MicroLoan Foundation’s work. Successful businesses can generate income, create employment and provide a pathway out of poverty.
But business growth is one pathway to impact, not the only one.
If we judge microfinance solely by the number of businesses that grow or the profits generated by borrowers, we risk overlooking some of its most important outcomes.
A woman who uses increased income to keep her children in school has achieved something significant.
A woman who can afford healthcare without selling her business assets has strengthened her family’s resilience.
A woman who can consistently provide nutritious meals for her family has improved their wellbeing.
And a woman who has the financial confidence and resources to make decisions about her family’s future has gained something that cannot be captured by business revenue alone.
As the microfinance sector continues to evolve, so too should the way we think about and measure impact.
Creating successful entrepreneurs is one important aspect, but financial inclusion is also about giving people the tools and opportunities to build more secure lives, manage uncertainty, withstand shocks, support their families and exercise greater economic agency.
For MicroLoan Foundation, this means looking beyond traditional measures of microfinance and asking a broader question: What difference does access to finance make to a woman’s life?
The answer might be a growing business. It might be children staying in school. It might be better food security, improved financial resilience or the confidence to plan for the future.
Often, it is all of these things.
Because ultimately, the goal of financial inclusion isn’t just to help women build businesses. It’s to give women greater control over their economic lives, and the opportunity to build a better future for themselves, their families and their communities.
The research referenced in this article is published in the Journal of Management Studies under the title “Why Microfinance Works – Even When It Doesn’t Create Entrepreneurs”, based on fieldwork with the Small Enterprise Foundation in South Africa.
Read the full article herePublished on: 08/09/2026