The impact of microcredit in reducing poverty has been debated for over 40 years with the article, ‘Microfinance: Good for the poor?’ that appeared in the Independent (Aug 28 – Sept 03 2015) being another voice. The article recognises the positive impact of microfinance in poverty eradication and suggests changes to enhance this impact.

The article however rates the impact of microcredit in poverty reduction as marginal and recommends job creation through SMEs as the one sure way to poverty reduction. We wish to respond to the article, explain how micro loans to micro clients develop the SME sector and conclude on why microfinance is still a relevant vehicle in the struggle to reduce poverty in Uganda.