Original Research

Access to micro- and informal loans: Evaluating the impact on the quality of life of poor females in South Africa

Talita Greyling, Stephanié Rossouw
South African Journal of Economic and Management Sciences | Vol 22, No 1 | a2944 | DOI: https://doi.org/10.4102/sajems.v22i1.2944 | © 2019 Talita Greyling, Stephanié Rossouw | This work is licensed under CC Attribution 4.0
Submitted: 18 December 2018 | Published: 27 June 2019

About the author(s)

Talita Greyling, School of Economics, University of Johannesburg, Johannesburg, South Africa
Stephanié Rossouw, Faculty of Business, Auckland University of Technology, Auckland, New Zealand


Background: Since the early 1980s, many governments have investigated the possibility of utilising access to microloans as a pathway to grow economies out of unemployment and thereby improve people’s quality of life. Studies that have previously investigated the impact of microloans found a positive effect on quality of life. Unfortunately, these mainly measure quality of life using monetary (income) measures rather than assessing the entire multidimensionality of quality of life.

Aim: This article investigates the relationship between objective multidimensional income-independent quality of life (IIQoL) and having access to micro- and informal loans (M&ILs). Specifically, we focus on South Africa’s most marginalised – ‘poor females’ and ‘poor females residing in rural areas’ – as their empowerment is a critical social objective aligned to that of international agencies.

Setting: This study investigates the relationship between IIQoL and access to M&ILs in South Africa.

Methods: We use a panel data set spanning four waves from 2008 to 2015 of the National Income Dynamics Survey. Principal component analysis is used to construct the IIQoL index and various panel and survey estimation techniques are applied in the regression analyses.

Results: M&ILs are significant and negatively related to IIQoL for both ‘poor females’ and ‘poor females residing in rural areas’. This implies that those with loans failed to translate those monetary gains into higher levels of IIQoL over time.

Conclusion: Access to M&ILs is not succeeding in raising the quality of life of South Africa’s most marginalised groups. Without intervention and education programmes imbedded within microloan initiatives, the marginalised will not experience an increase in their non-income quality of life.


Quality of life; income-independent measures; microloans; informal loans; South Africa


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Crossref Citations

1. Influence of informal financial literacy training on financial knowledge and behavior of rural farmers: Evidence from Uganda
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