That innovation and entrepreneurship are important for poverty
alleviation and development is well established. However, despite a
general agreement that finance affects growth and development by
supporting innovative activities in the economy, little has been written
specifically on how pro-poor entrepreneur-based innovation in rural
areas should be financed. This review explores the literature relevant
to understanding financing of pro-poor innovation and entrepreneurship,
and shows that financial theories are moving from linear supply-led
subsidised credit approaches towards new, more systemic perspectives.
These include theories on financial systems theories, microfinance, and
financial access and inclusion. This review notes that a theoretical and
policy gap exists as regards financing of pro-poor entrepreneur-based
innovation in rural areas.
Keywords: Pro-poor finance, finance innovation, finance entrepreneurship, financial innovation, rural finance
JEL Codes: O16, O18, O31, R51
UNU-MERIT Working Papers ISSN 1871-9872