MicroFinancial Services and Risk Management for Food Security: A Vulnerable Household Perspective

Microfinance has been perceived as a positive force in stimulating entrepreneurship, and regional and national development. Essentially there is a strong belief that other than narrowing the gap between the rich and the poor, access to microfinance creates a culture or a movement towards social responsibility for the subset of the population that is subjected to both social and financial exclusion. There is evidence supporting the fact that microfinancial services can promote food security and income and consumption smoothing for vulnerable households. However, there seem to be problems that cannot be ironed out just by providing access to these services as vulnerable householders are subjected to immense social and financial pressures. Nevertheless, there are mechanisms supporting vulnerable groups to be more empowered and enabling capacity build to overcome income and consumption shocks and thus reducing vulnerability.