The role of microfinance in overcoming youth unemployment: a systematic literature review

The article systematically deliberates the contributions of microfinance to tackling youth unemployment worldwide. The study followed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) 2020 guidelines. The analysis included 34 articles published between 2000 and 2025, selected from Google Scholar and Scopus. Data were analyzed using thematic analysis, both manually and with NVivo. The findings revealed that most studies were conducted in Africa rather than in other continents. The findings indicate that most African countries face higher rates of unemployment and lack effective strategies to enhance youth access to microfinance capital and convert it into employment opportunities. The literature indicates that microfinance has a positive and non-significant influence on youth employment. Overall, the findings indicate that microfinance has not adequately addressed youth unemployment worldwide. Various challenges, including poor design, inadequate capital, insufficient skills, ineffective government-supportive policies, and the failure to link microfinance and job-creation programmes, collectively act as barriers. Addressing those challenges will enhance the effectiveness of microfinance in overcoming youth unemployment. Policymakers should devise policies that integrate youth microfinance services with youth employment programmes to address youth unemployment.