the Challenges Facing Microfinance Institutions in Poverty Eradication: A Case Study in Mogadishu

Abstract: The purpose of this paper is to introduce practical evidence about challenges facing
microfinance institutions in poverty eradication and to examine what role microfinance institutions can
play in eradication of poverty in Mogadishu.
A survey research method has been adopted to examine challenges facing microfinance institutions in
poverty eradication. The data were collected through questionnaires filled by the respondents equally
selected from Salaam Somali bank and Sa’id foundation in Mogadishu, Somalia. The results of the
questionnaire were then analyzed with the aid of SPSS.
The results showed that the microfinance institutions have a positive impact on alleviation of poverty
among poor people. Misconception about microfinance institutions due to their newly inception, inadequate
loans, less mentionable support from government and donor funding hinder the microfinance institutions
flourishing and hence this research provides contribution in the field of microfinance in poverty
eradication.
Keywords: Challenges, Microfinance Institutions, Poverty Eradication