Microfinance is one of the tools used to leverage poverty alleviation and development. It serves to break the vicious circle. Even if it is not a panacea, it has a very important place nowadays in the fight for poverty reduction and the promotion of development. Far from being a simple matter for bankers, microfinance is above all a tool for development (Joanna, 1996).

Analyzing development as a combination of mental and social changes that make it capable of cumulatively increasing the standard of living of households leads to a reflection on the definition of poverty. Absolute poverty is defined as the expenditure on a minimum of foodstuffs ensuring physiological reproduction, plus a conventional number of other expenses determined on the basis of the most modest family budgets. Relative poverty, on the other hand, is calculated by taking into account the income distribution of a given population, and the poverty line is defined by a specific quantile.

Considering financial services such as credit, savings and insurance as a mechanism for promoting financial resilience provides food for thought on the place of microfinance in household financial development. The explicit consideration of risk and vulnerability raises questions about the role of IMF programs in the household economy. These questions take on particular importance given the rise of microfinance and the expectations associated with it as a development tool, especially in rural areas.

As microfinance is a development tool, it contributes to a situation where society and the productive apparatus have the conditions for development. In other words, the objectives of an IMF are generally based on the principle of getting financially vulnerable individuals out of their situations to ensure sustainable development (Traoré, Bocoum, & Tamini, 2020). Madagascar has always made a big deal about improving and expanding microfinance for poverty reduction and development. This is still one of the reasons, in fact, for the appearance of various microfinance institutions (Conso, 1992). But the question is to what extent do IMF programs impact the financial evolution of rural households?

Indeed, the evolution of the income and savings of households that are members of an IMF, which is a function of program management, generally reflects the financial evolution of these households.

This study, therefore, aims to evaluate, through a sample of 200 rural households, the impact of microfinance institutions’ actions on the financial evolution of households. More specifically, this research attempts to provide insight into the consequences of integration into IMF programs on the income and savings capacity of households.

Based on the assumption that IMFs programs will allow households to improve their financial situation, the results of a survey in the form of an opinion poll will be processed and analyzed statistically using the SPHINX data processing software.

The financial system, also known as the financial sector or financial infrastructure, includes all savings and financing opportunities, the financial institutions that provide these opportunities, and the financial institutions that provide the services (Aghion, Howitt, & Mayer-Foulkes, 2005).

Microfinance institutions can be non-governmental organizations (ONGs), savings and credit cooperatives, credit unions, state-owned banks, commercial banks, or non-bank financial institutions. The clients of these institutions are usually self-employed, low-income entrepreneurs in rural or urban areas.

As development organizations, microfinance institutions aim to meet the financial needs of underserved or unserved market segments from a development perspective.

Development goals typically include:

­ Poverty reduction;

­ Strengthening the social position of women or disadvantaged population groups;

­ Creation of employment opportunities;

­ Supporting the growth and diversification of existing businesses;

­ Encouraging the creation of new businesses.

A World Bank study of credit projects identified the three most frequently cited objectives:

To generate employment and income opportunities through the creation and development of microenterprises.

Increase the productivity and income of socially vulnerable groups, especially women and the poor.

Reduce the dependence of rural families on drought risks through diversification of their income-generating activities.

Despite the many contextual variables in each country, the two long-term goals of microfinance remain outreach, i.e., serving those who have been left out by financial institutions (e.g., women, the poor, and indigenous and rural populations), and sustainability, which entails generating enough income to cover the costs of providing financial services.

The term microfinance refers to the provision of financial services to a clientele that is often excluded from the banking system, including small-scale self-employed people. Microfinance is a development tool thanks to the offer of financial and non-financial services. The financial services offer concerns savings and credit. Savings are the essential tool for investment. It helps to break the vicious circle of underdevelopment or poverty that results from the lack or weakness of income due to several factors, including excess population, bad climate, mentality, economic and political conditions, etc.

Savings guarantee development, which can only be achieved through good productivity and profitability.

The microfinance sector in Madagascar includes three types of organizations:

­ “Member-based” and/or self-managed institutions, mostly mutualists, which collect savings and grant loans to their members.

­ “Client-based” institutions, which are organizations whose main activity is the distribution of loans and which do not link borrowing to the constitution of prior savings.

­ Projects with a “credit component” and ONGs or associations that do not consider credit to be their main activity, as credit is often seen as one component among others in the projects implemented.

With the objective of evaluating the impact of microfinance institutions’ actions on the financial evolution of households, this research attempts to provide an overall reflection on the impacts of the integration of households into MFI programs on the evolution of their income and savings capacities.

The methodological approach is based on the verification of the hypothesis that IMF programs will enable households to improve their financial situation. Thus, the hypothetical-deductive approach is the most appropriate. Indeed, the analysis is based on the results of research conducted with a sample of 200 households from rural areas. The data collected will then be statistically processed using SPHINX software to produce interpretations related to the theme.

The first highlight from our analyses of the impacts of household membership in IMF programs is the evolution of household income. These impacts are found to be very significantly dependent on the indicators of the Chi-square test of independence. Thus, Table 6 shows that exactly 3 out of 4 people who never benefited from or sought out financial offers from IMFs did not change their income situation at all or were unable to do so. Conversely, households that are always assisted by IFM programs following their requests almost all have seen their incomes evolve or change significantly. Moreover, 84.4% of those who say they often use the financial services of IMFs immediately notice their incomes changing. These dramatic effects are all attributed to the IMFs’ program assets.

At the same time, the cross-analysis between the IMFs’ program contracts and the households’ opinions on their ability to save, using the chi-square test of independence was deemed very significant. We can see from Table 7 the contributions made by these IMFs to the financial situation of the contractors. Indeed,

Source: Authors 2021.

Source: Authors 2021.

Source: Authors 2021.

87.6% of the households that have often used the financial services offered also claim to have the possibility of saving often. It should be noted that 36% of households that have never had the opportunity to benefit from the program contracts admit that they have never had the opportunity to save in their lives.

Source: Authors 2021.

However, it is clear that reasonable or even rare assistance from IMFIs through their program contracts is effective because more than 4 out of 10 households, or more precisely 41.7% of households, stated that they were always able to save.

In addition, it is worth noting, following our analyses of the impact of the attribution of MFI programs to savings relative to their evolution, on the one hand, a significant dependence of these acts according to the Chi-square test and, on the other hand, the positive effect observed. In fact, according to Table 8, 87.2% of households that often contracted IMFs savings programs claim to have noticed their savings evolve and more than the majority, i.e. the 63.7% that systematically contract IMFs savings offers see their savings evolve or very evolve.

All economic growth requires the accumulation of capital. Despite the desire and willingness to lift oneself out of poverty, the lack of resources, especially financial resources, is an obstacle. Several previous theories and research studies have discussed the role of microfinance in the fight against poverty and in helping individuals who have been disadvantaged by the banking system to develop. The results of this research, based on a sample of 200 rural households, show that the contributions of MFI programs have had a positive impact not only on monthly household income but also on savings capacity.

The authors declare no conflicts of interest regarding the publication of this paper.

Rakotondramanana, A. L. H., Randrianirina, H. H. R., Randriamiharisoa, M. A., & Andrianarizaka, M. T. (2021). Contributions of IMFs Programs to Household Financial Resilience: Financial Evolution of Households in Rural Areas. Modern Economy, 12, 1949-1958. https://doi.org/10.4236/me.2021.1212102

Source: Authors 2021. The difference with the reference distribution is very significant. chi2 = 70.60, ddl = 4, 1 − p ≥ 99.99%.