Microfinance in Africa: Is it either the problem or the solution?

This article is based on research undertaken on micro enterprises in the informal sector in Kenya, Malawi and Ghana. It seeks to provoke critical reflection on the uncritical enthusiasm that lies behind much proselytizing of microfinance for informal sector micro enterprise. It questions whether the extensive donor interest in micro enterprise finance really addresses the problems of micro entrepreneurs or whether it offers the illusion of a quick fix. It suggests that the real problems are more profound and cannot be tackled solely by capital injections but require fundamental structural changes of the socioeconomic conditions that define informal sector activity and a fuller understanding of the ‘psyche’ of informal sector entrepreneurs.