Microfinance in Yemen “Challenges and Opportunities “

This paper aims to identify the challenges and the opportunities facing 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, Government of Yemen, Microfinance books, websites, official reports and other sources related to the research subject. The said study covered the period from 1997 to 2013 and the region for the study was Yemen. The result of the study reported that there are multiple factors affecting the development of microfinance in Yemen, such as high interest rate, improper management, shortage in the qualified staff, unavailability of professional skills, financial literacy, religious perception, demanded collaterals. However, despite the difficulties and challenges facing Microfinance industry in Yemen, many studies revealed that there is potential promising market in Yemen. It is believed that about 3% of the total market has been penetrated and left more than 2 million potential clients un-served.