How effective is microfinance as a poverty reduction tool?

Professor Mohammad Yunus, The founder of Grameen Bank in Bangladesh and the originator of the concept of microfinance, believes that 5 per cent of Grameen Bank's clients exit poverty each year. However, there are surprisingly few credible estimates of the extent to which microcredit actually reduces poverty. Even the recent more rigorous research findings are not free of methodological limitations or controversies. Thus, the continuing intense debate about the impact of microfinance on poverty reduction is not surprising. Despite the euphoria of the Nobel Peace Prize going to Professor Mohammad Yunus, there are many sceptics.