Background: Since the early 1980s, many governments have investigated the possibility of utilising access to microloans as a pathway to grow economies out of unemployment and thereby improve people’s quality of life. Studies that have previously investigated the impact of microloans found a positive relationship to quality of life. Unfortunately, these studies mainly measure quality of life using monetary (income) measures rather than assessing the entire multidimensionality of quality of life.

Aim: This paper investigates the relationship between objective multidimensional income-independent quality of life (IIQoL) and having access to micro – and informal loans (M&ILs). Specifically, we focus on South Africa’s most marginalized, i.e. ‘poor females’ and ‘poor females residing in rural areas’, as their empowerment is a critical social objective, aligned to that of international agencies.

Methods: We use a panel dataset spanning four waves from 2008 to 2015 of the National Income Dynamics Study (NIDS). Principal component analysis is used to construct the IIQoL index and various panel; and survey estimation techniques are applied in the regression analyses.

Results: M&ILs are significant and negatively related to IIQoL for both; ‘poor females’ and ‘poor females residing in rural areas’. This implies that those ‘with’ loans failed to translate those monetary gains into higher levels of IIQoL over time.

Conclusions: Access to M&ILs does not increase the quality of life of South Africa’s most marginalized groups. Without government interventions and education programmes, related to microloans, the marginalized will not experience an increase in their non-income quality of life.