İshtiaq AHMAD, Rizwan Ahmed SATTİ

7287

ADDRESSING POVERTY THROUGH MICROFINANCE: DOES IT WORK?

Purpose- For the couple of decades microfinance has remained nucleus of developing nations to combat poverty. This paper aims to examine whether microfinance succeeded to reduce poverty? In this study poverty has been taken as analogous to ‘extreme poverty’.     Methodology- Influence of microfinance in poverty eradication is investigated by comparing clients in first loan cycle with the clients of higher loan cycles. The data was analyzed in two ways; firstly, simple and straight forward descriptive analysis with simple univariate technique  and secondly, empirical analysis is made by using binary logit model.   Findings- It is found that intermediation of microfinance did not only raise the income of borrowers but also lifted their spending over the loan cycles. The study also explores that over the successive loan cycles, possession of household durable item, spending on education, respond to the shocks and health status also improved. Clients in higher loan cycles managed to improve their social status. Conclusion-  Almost every examined poverty indicator indicates positive impact of microfinance on poverty eradication. However, various colors of poverty in the society do not allow us to cultimate the effectiveness of microfinance in poverty eradication.  
Keywords:

Business, gilgit, microfinance poverty eradication, saving and consumption,

PDF

___

  • AKF. (2012). AKRSP: Annual Report 2012, Monitoring, Evaluation and Research. Section. http://www.akdn.org/publications.asp
  • AKRSP.(2001). Microfinance Programme Operations Review 2000. http://www.mixmarket.org/sites/default/files/medialibrary/20501.308/AKRSP-AR-00.pdf
  • Ahmad, I., and Satti, R. A. (2017). Empowerment through Microfinance: Where does it tilt? A Case Study of District Gilgit, Pakistan. Imperial Journal of Interdisciplinary Research (IJIR), 3(2),1153-1160.
  • Asian Development Bank. Economics, Re, and Asian Development Bank. Development Indi. (2011). Key Indicators for Asia and the Pacific 2011. Asian Development Bank.
  • Augsburg, B., De Haas, R., Harmgart, H., and Meghir, C. (2012). Microfinance at the margin: experimental evidence from Bosnia and Herzegovina.
  • Banerjee, A., Chandrasekhar, A. G., Duflo, E., and Jackson, M. O. (2013). The diffusion of microfinance. Science, 341(6144), 1236498.
  • Banerjee, A., Duflo, E., Glennerster, R., and Kinnan, C. (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7(1), 22-53.
  • Basu, K. (2013). Shared prosperity and the mitigation of poverty: in practice and in precept. World Bank Policy Research Working Paper, (6700).
  • Bauwin, M., and Jbili, W. (2017). Loyalty, trust, and glass ceiling: The gender effect on microcredit renewal (No. 2017/101). WIDER Working Paper.
  • Cheston, S., and Kuhn, L. (2002). Empowering women through microfinance. Draft, Opportunity International. http://storage.globalcitizen.net/data/topic/knowledge/uploads/201101311419705.pdf
  • Chowdhury, M. J. A., Ghosh, D., and Wright, R. E. (2005). The impact of micro-credit on poverty: evidence from Bangladesh. Progress in Development studies, 5(4), 298-309.
  • Coleman, B. E. (2006). Microfinance in Northeast Thailand: Who benefits and how much? World development, 34(9), 1612-1638.
  • Crepon, B., Devoto, F., Duflo, E., and Pariente, W. (2011). Impact of microcredit in rural areas of Morocco: Evidence from a Randomized Evaluation. MIT Working Paper.
  • De Spoelberch, G., and Shaw, R. D. A. (1987). A Model: The Aga Khan Rural Support Program. Challenge, 29 (6), 26-31
  • Hussein, M. H. (2009). State of Microfinance in Afghanistan. Institute of Microfinance (InM). http://inm.org.bd/wp-content/themes/inm/pdf/Afghanistan.pdf
  • Hytopoulos, E. (2011). The impact of microfinance loans on children’s educational attainment in rural thailand. Economics.
  • Imai, K. S., and Azam, M. S. (2012). Does microfinance reduce poverty in Bangladesh? New evidence from household panel data. Journal of Development Studies, 48(5), 633-653
  • Kessy, S. (2009). Microfinance and enterprises performance in Tanzania: Does gender matter. Repositioning African Business and Development for the 21st Century, 125-131.
  • Khandker, S. R. (2005). Microfinance and poverty: Evidence using panel data from Bangladesh. The World Bank Economic Review, 19(2), 263-286.
  • MacIsaac, N. (1997). The role of microcredit in poverty reduction and promoting gender equity: A discussion paper report to CIDA.
  • Maîtrot, M., and Niño‐Zarazúa, M. (2017). Poverty and wellbeing impacts of microfinance: What do we know?. Max Roser and Esteban Ortiz-Ospina (2017) – ‘Global Extreme Poverty’. Published online at OurWorldInData.org. https://ourworldindata.org/extreme-poverty.
  • Mosley, P. (2001). Microfinance and poverty in Bolivia. Journal of Development Studies, 37(4), 101-132.
  • Nader, Y. F. (2008). Microcredit and the socio-economic wellbeing of women and their families in Cairo. The Journal of SocioEconomics, 37(2), 644-656.
  • PMN. (2013). Microfinance Review 2013; www.brecorder.com/mfr2013
  • Riaz, A., Muhammad, S., Ashraf, I., and Zafar, M. I. (2012). Role of Punjab rural support program in improving economic conditions of rural women through micro financing. Pak. J. Agri. Sci, 49(2), 211-216.
  • Samer, S., Majid, I., Rizal, S., Muhamad, M. R., and Rashid, N. (2015). The impact of microfinance on poverty reduction: Empirical evidence from Malaysian perspective. Procedia-Social and Behavioral Sciences, 195, 721-728.
  • Shil, N. C. (2009). Micro finance for poverty alleviation: A commercialized view. International Journal of Economics and Finance, 1(2), 191.
  • Shirazi, N. S. (2012). Targeting and Socio-Economic Impact of Microfinance: A Case Study of Pakistan. Islamic Economic Studies, 20(2), 1-28.
  • Shirazi, N.S. and Khan, A.U. (2009). Role of Pakistan Poverty Alleviation Fund’s Microcredit in Poverty Alleviation: A Case Study of Pakistan, Pakistan Economic and Social Review, Vol. 47, No. 2, 215-228.
  • Sivachithappa, K. (2013). Impact of Micro Finance on Income Generation and Livelihood of Members of Self Help Groups–A Case Study of Mandya District, India. Procedia-Social and Behavioral Sciences, 91, 228-240.
  • Swamy, V. (2014). Financial inclusion, gender dimension, and economic impact on poor households. World Development, 56, 1-15.
  • Van Rooyen, C., Stewart, R., and De Wet, T. (2012). The impact of microfinance in sub-Saharan Africa: a systematic review of the evidence. World Development, 40(11), 2249-2262.
  • Wright, G. A., Kasente, D., Semogerere, G., and Mutesasira, L. (1999). Vulnerability, risks, assets and empowerment. The impact of microfinance on poverty alleviation: Final report. http://www.academia.edu/download/31091259/1730_file_01730.pdf
  • Yusuf, M.B.O., Shirazi, N. S., and Ghani, G.M. (2013). The Impact of Pakistan Poverty Alleviation Fund on Poverty in Pakistan: An Empirical Analysis, Middle-East Journal of Scientific Research 13 (10), 1335-1344.
Journal of Business Economics and Finance-Cover
  • Yayın Aralığı: Yılda 4 Sayı
  • Başlangıç: 2012
  • Yayıncı: PressAcademia
Arşiv
Sayıdaki Diğer Makaleler

Melek ERDİL

Ercument OZKARACA

Ahmet INCEKARA, Akmyrat AMANOV

Mustafa TURHAN

Mohamed Nazir TARABAY, Jamil HAMMOUD

Semra ERPOLAT TASABAT, Olgun AYDİN, Ali HEPSEN

Godwin Aloyce MYOVELLA, Zakayo Samson KİSAVA

Mariola KAPİDANİ

Chang-sheng LİAO

Coffie Francis José N'GUESSAN