SOCIAL INCLUSION THROUGH MICROFINANCE: AN ANALYSIS OF CURRENT APPROACHES AND NEW FOLLOW-UP PROCEDURES

In the last twenty years, following a fast and strong expansion, microfinance has been characterized worldwide by a relevant heterogeneity of the actors involved, especially in its main segment, microcredit. The socio-economic vulnerability of the population involved in this type of project led to the need for new concepts of sustainability, based on a schism between the institutionist and the welfarist approaches. Previous impact assessments demonstrated that a proper access to financial services improves life conditions among economically active poor persons by increasing their entrepreneurship opportunities and thus their income. Nevertheless, commercial and institutional approaches can lead astray from the original purpose, considering microfinance merely as a new tool to access financial services and not as a whole range of social processes driven by both financial and social services. Based on a research paper on the microfinance sector in Jordan, one of the most developed Arab countries in terms of microlending, this study analyses the different approaches of microfinance adopted in Jordan in the last years, focusing on the socio-economic impacts and the development of a relevant social return, at three levels: personal, communitarian and regional levels. The research shows the need for the implementation of new procedures within microfinance institutions (MFIs), based on specific approaches that allow the fulfillment of all the requirements related to the business cycle, in both an economic and a social perspective. From the access to financial services to the management of the micro-enterprise, the population targeted by the MFIs faces a diverse range of challenges, therefore loan officers should act as social workers and business developers, adopting specific follow-up procedures able to contribute to a real social impact.