Microfinance in Yemen: “Challenges and Opportunities”

Abstract

This paper aims to identify the challenges and opportunities of Microfinance in Yemen. The paper is mainly based on the secondary data collected from the records of the Social Fund for Development, Yemen Microfinance Network, Microfinance Magazine, Consultant Group to Assist the Poor, MFIs websites, etc. The study covered the period from1997 to 2015. The result of the study reported that there are several factors affecting the development of microfinance in Yemen, such as Lack of Experience and Weak Intermediaries, Under Developed Infrastructure, Cultural Barriers and Attitude, Clients Incapacity, high interest rate, improper management, and unavailability of professional skills, financial literacy, and religious perception. With innovation and experimentation, Yemen could develop its own model for sustainable microfinance that takes into account the difficult local specifics of Yemen.