Impact of Microfinance and Entrepreneurship on Poverty Alleviation: Does National Culture Matter?

Abstract

Microfinance, national culture, entrepreneurship and poverty alleviation are four concepts which have not always gone together or been worked upon within the same context. In recent years however, we have come across new elements, instruments and ideas which place increasing emphasis on the link among these concepts. The purpose of this paper was to analyze the relationship among national culture dimensions, entrepreneurship, the need of microfinance services, and the impact of this relationship on poverty alleviation.  Microfinance is regarded by the World Bank and governments as a powerful tool in combating poverty. Nevertheless, there is still a disagreement among scholars on its impact on poverty alleviation for the poor because not all the poor in the society are eligible for microfinance interventions for some of them lack entrepreneurial skills. Furthermore, even though entrepreneurs in different countries share some universal traits, they may also have other traits that are specific to their own national culture. Based on a methodical literature survey, this study provides a combination of critical argument and scholarly analysis. There is empirical evidence that entrepreneurship attitude is highly influenced by cultural values, and this association is based on the framework of Hofstede’s cultural dimensions hence substantiating the existence of a correlational relationship among national culture, entrepreneurship and microfinance towards poverty alleviation.

Keywords: National Culture dimensions, Entrepreneurship, Microfinance, Poverty Alleviation