THE IMPACT OF MICROFINANCE BANKS IN RURAL AREAS OF SUB-SAHARAN AFRICA
DOI:
https://doi.org/10.29121/granthaalayah.v5.i9.2017.2201Keywords:
Microfinance, Micro-Credit, Micro-Savings, Developing Countries, Poverty, ImpactAbstract [English]
Many researchers consider microfinance as a tool for poverty reduction. Even more, especially in post-conflict African countries, micro-financial institutions are seen as an opportunity of reconciliation. Lending from microfinance institutions to that from traditional banks and examine their respective effects upon economic growth has been practiced in some sub-Saharan countries. Considerable progress in research has been found that microfinance loans raise growth comparatively to that of traditional banks. A lot of number of researches carried out in sub-Saharan countries even in other developing countries outside of Africa did not find strong evidence that bank loans raise growth. There is, however, some evidence that bank loans do increase investment, whereas microfinance loans do not appear to do so. Differently, other researchers highlighted clearly that microfinance can provide its contribution on poverty reduction and better access to finance needed for startup micro-entrepreneurs along the world. These results suggest that microfinance loans are not primarily invested as physical capital in developing countries, but could still augment total factor productivity, whereas banks may have been financing non-productive investments. Herein, we highlighted the impact of microfinance banks on developing countries economic growth. We also indicate how microfinances system incorporated in rural areas boosted the lifestyle of poor people in Sub-Saharan Africa.
Downloads
References
Adams, D. W., Graham, D. H., & Von Pischke, J. D. (1984). UNDERMINING RURAL DEVELOPMENT WITH CHEAP CREDIT. Westview Press.
Adjei, J. K., Arun, T., & Hossain, F. (2009). THE ROLE OF MICROFINANCE IN ASSET BUILDING AND POVERTY REDUCTION: THE CASE OF SINAPI ABA TRUST OF GHANA. Manchester, Brooks World Poverty Institute.
Agbola, F. W., Acupan, A., & Mahmood, A. (2017). DOES MICROFINANCE REDUCE POVERTY? NEW EVIDENCE FROM NORTHEASTERN MINDANAO, THE PHILIPPINES. Journal of Rural Studies, 50, 159-171. doi:10.1016/j.jrurstud.2016.11.005 DOI: https://doi.org/10.1016/j.jrurstud.2016.11.005
Ahmeti, F. (2014). MICROFINANCE AS A TOOL FOR ECONOMIC DEVELOPMENT IN TRANSITIONAL COUNTRIES: EXPERIENCE FROM KOSOVO. European Scientific Journal, 10(4), 1-19.
Allafrica.com. (2009). Swaziland. http://allafrica.com.
Arouna, A., Lokossou, J. C., Wopereis, M. C. S., Bruce-Oliver, S., & Roy-Macauley, H. (2017). CONTRIBUTION OF IMPROVED RICE VARIETIES TO POVERTY REDUCTION AND FOOD SECURITY IN SUB-SAHARAN AFRICA. Global Food Security, 14, 54-60. doi:10.1016/j.gfs.2017.03.001 DOI: https://doi.org/10.1016/j.gfs.2017.03.001
Ashraf, N., Gine, X., & Karlan, D. (2008). FINDING MISSING MARKETS (AND A DISTURBING EPILOGUE): EVIDENCE FROM AN EXPORT CROP ADOPTION AND MARKETING INTERVENTION IN KENYA. Washington, DC, World Bank. DOI: https://doi.org/10.1596/1813-9450-4477
Barnes, C., Gaile, G., & Kibombo, R. (2001). THE IMPACT OF THREE MICROFINANCE PROGRAMS IN UGANDA. Washington, DC, Development Experience Clearinghouse, USAID.
Barnes, C., & Keogh, E. (1999). AN ASSESSMENT OF THE IMPACT OF ZAMBUKO’S MICRO-ENTERPRISE PROGRAM IN ZIMBABWE: BASELINE FINDINGS. Washington, DC, Management Systems International.
Bos, J. W. B., & Millone, M. (2015). PRACTICE WHAT YOU PREACH: MICROFINANCE BUSINESS MODELS AND OPERATIONAL EFFICIENCY. World Development, 70, 28-42. doi:10.1016/j.worlddev.2014.12.018 DOI: https://doi.org/10.1016/j.worlddev.2014.12.018
Brannen, C. (2010). AN IMPACT STUDY OF THE VILLAGE SAVINGS AND LOAN ASSOCIATION (VSLA) PROGRAM IN ZANZIBAR, TANZANIA. BA Dissertation, Wesleyan University.
Coleman, B. E. (2006). MICROFINANCE IN NORTHEAST THAILAND: WHO BENEFITS AND HOW MUCH? World Development, 34(9), 1612-1638. doi:10.1016/j.worlddev.2006.01.006 DOI: https://doi.org/10.1016/j.worlddev.2006.01.006
Diao, X., Hazell, P., & Thurlow, J. (2010). THE ROLE OF AGRICULTURE IN AFRICAN DEVELOPMENT. World Development, 38(10), 1375-1383. doi:10.1016/j.worlddev.2009.06.011 DOI: https://doi.org/10.1016/j.worlddev.2009.06.011
Doocy, S., Teffera, S., Norell, D., & Burnham, G. (2005). CREDIT PROGRAM OUTCOMES: COPING CAPACITY AND NUTRITIONAL STATUS IN THE FOOD INSECURE CONTEXT OF ETHIOPIA. Social Science and Medicine, 60(10), 2371–2382. DOI: https://doi.org/10.1016/j.socscimed.2004.10.025
Dupas, P., & Robinson, J. (2008). SAVINGS CONSTRAINTS AND MICROENTERPRISE DEVELOPMENT: EVIDENCE FROM A FIELD EXPERIMENT IN KENYA (WORKING PAPER NO 14693). Cambridge MA, National Bureau of Economic Research.
halib, A. K. (2007). MEASURING THE IMPACT OF MICROFINANCE INTERVENTION: A CONCEPTUAL FRAMEWORK OF SOCIAL IMPACT ASSESSMENT. Singapore Economic Review Conference, 15–17.
Gubert, F., & Roubaud, F. (2005). ANALYSER L’IMPACT D’UN PROJET DE MICROFINANCE: L’EXEMPLE D’ADE´FI A` MADAGASCAR. Paris: DIAL (Developpement Institutions et Analyses de Long terme)
Hermes, N., & Lensink, R. (2011). MICROFINANCE: ITS IMPACT, OUTREACH, AND SUSTAINABILITY. World Development, 39(6), 875-881. doi:10.1016/j.worlddev.2009.10.021 DOI: https://doi.org/10.1016/j.worlddev.2009.10.021
Jia, X., Cull, R., Guo, P., & Ma, T. (2016). COMMERCIALIZATION AND MISSION DRIFT: EVIDENCE FROM A LARGE CHINESE MICROFINANCE INSTITUTION. China Economic Review, 40, 17-32. doi:10.1016/j.chieco.2016.05.007 DOI: https://doi.org/10.1016/j.chieco.2016.05.007
Kan, J. M. L., Olds, D. L., & Kah, M. M. O. (2005). MICROCREDIT, SOCIAL CAPITAL, AND POLITICS. Journal of Microfinance, 7, 1121–1115.
Kodongo, O., & Kendi, L. G. (2013). INDIVIDUAL LENDING VERSUS GROUP LENDING: AN EVALUATION WITH KENYA'S MICROFINANCE DATA. Review of Development Finance, 3(2), 99-108. doi:10.1016/j.rdf.2013.05.001 DOI: https://doi.org/10.1016/j.rdf.2013.05.001
Lacalle Calderon, M., Rico Garrido, S., & Duran Navarro, J. (2008). ESTUDIO PILOTO DE EVALUACION DE IMPACTO DEL PROGRAMA DE MICROCREDITOS DE CRUZ ROJA ESPANOLA EN RUANDA. Revista de Economia Mundial, 19, 83–104.
Lakwo, A. (2006). MICROFINANCE, RURAL LIVELIHOODS, AND WOMEN’S EMPOWERMENT IN UGANDA. (AFRICAN STUDIES CENTRE RESEARCH REPORT NO 85). (Ph.D.Thesis), Radboud Universiteit, Nijmegen.
Leo, H., & Alfred, L. (2010). RETHINKING THE IMPACT OF MICROFINANCE IN AFRICA: BUSINESS CHANCE OR SOCIAL EMANCIPATION. European Journal of Development Research, 22, 529–545.
Littlefield, E., Morduch, J., & Hashemi, S. (2003). IS MICROFINANCE AN EFFECTIVE STRATEGY TO REACH THE MILLENNIUM DEVELOPMENT GOALS? FOCUS NOTE 24, CGAP. Washington, DC, World Bank.
Lopatta, K., & Tchikov, M. (2016). DO MICROFINANCE INSTITUTIONS FULFILL THEIR PROMISE? EVIDENCE FROM CROSS-COUNTRY DATA. Applied Economics, 48, 1655–1677. DOI: https://doi.org/10.1080/00036846.2015.1105924
Mazumder, M. S. U., & Lu, W. (2015). WHAT IMPACT DOES MICROFINANCE HAVE ON RURAL LIVELIHOOD? A COMPARISON OF GOVERNMENTAL AND NON-GOVERNMENTAL MICROFINANCE PROGRAMS IN BANGLADESH. World Development, 68, 336-354. doi:10.1016/j.worlddev.2014.12.002 DOI: https://doi.org/10.1016/j.worlddev.2014.12.002
McIntosh, C., Villaran, G., & Wydick, B. (2011a). MICROFINANCE AND HOME IMPROVEMENT: USING RETROSPECTIVE PANEL DATA TO MEASURE PROGRAM EFFECTS ON FUNDAMENTAL EVENTS. World Development, 39, 922–937.
McIntosh, C., Villaran, G., & Wydick, B. (2011b). MICROFINANCE AND HOME IMPROVEMENT: USING RETROSPECTIVE PANEL DATA TO MEASURE PROGRAM EFFECTS ON FUNDAMENTAL EVENTS. World Development, 39, 922–937. DOI: https://doi.org/10.1016/j.worlddev.2011.03.001
Mknelly, B., & Dunford, C. (2000). IMPACT OF CREDIT WITH EDUCATION ON MOTHERS AND THEIR YOUNG CHILDREN’S NUTRITION: LOWER PRA RURAL BANK CREDIT WITH EDUCATION PROGRAM IN GHANA. Freedom from Hunger, 1–2.
Morris, G., & Barnes, C.. (2005). AN ASSESSMENT OF THE IMPACT OF MICROFINANCE. Journal of Microfinance, 7(1), 40–54.
Nanor, M. A. (2008). MICROFINANCE AND ITS IMPACT ON SELECTED DISTRICTS IN EASTERN REGION OF GHANA. College of Art and Social Sciences, Kumasi. Kwame Nkrumah University of Science and Technology.
Nawaz, S. (2010). MICROFINANCE AND POVERTY REDUCTION: EVIDENCE FROM A VILLAGE STUDY IN BANGLADESH. Journal of Asian and African Studies, 45, 670–683. DOI: https://doi.org/10.1177/0021909610383812
Ngoasong, M. Z., & Kimbu, A. N. (2016). INFORMAL MICROFINANCE INSTITUTIONS AND DEVELOPMENT-LED TOURISM ENTREPRENEURSHIP. Tourism Management, 52, 430-439. doi:10.1016/j.tourman.2015.07.012 DOI: https://doi.org/10.1016/j.tourman.2015.07.012
Ozturk, I. (2017). THE DYNAMIC RELATIONSHIP BETWEEN AGRICULTURAL SUSTAINABILITY AND FOOD-ENERGY-WATER POVERTY IN A PANEL OF SELECTED SUB-SAHARAN AFRICAN COUNTRIES. Energy Policy, 107, 289-299. doi:10.1016/j.enpol.2017.04.048 DOI: https://doi.org/10.1016/j.enpol.2017.04.048
Pronyk, P. M., Kim, J. C., Abramsky, T., Phetl, G., Hargreaves, J. R., & Morison, L. A. (2008). A COMBINED MICROFINANCE AND TRAINING INTERVENTION CAN REDUCE HIV RISK BEHAVIOR IN YOUNG FEMALE PARTICIPANTS. AIDS, 22(13), 1659–1665. DOI: https://doi.org/10.1097/QAD.0b013e328307a040
Raihan, S., Osmani, S. R., & Khalily, M. A. B. (2017). THE MACRO IMPACT OF MICROFINANCE IN BANGLADESH: A CGE ANALYSIS. Economic Modelling, 62, 1-15. doi:10.1016/j.econmod.2017.01.002 DOI: https://doi.org/10.1016/j.econmod.2017.01.002
Shimamura, Y., & Lastarria-Cornhiel, S. (2009). CREDIT PROGRAM PARTICIPATION AND CHILD SCHOOLING IN RURAL MALAWI. World Development, 38(4), 567–580. DOI: https://doi.org/10.1016/j.worlddev.2009.11.005
Ssewamala, F. M., Ismayilova, L., McKay, M., Sperber, E., Bannon, W., & Alice, S. (2010). GENDER AND THE EFFECTS OF AN ECONOMIC EMPOWERMENT PROGRAM ON ATTITUDES TOWARD SEXUAL RISK-TAKING AMONG AIDS ORPHANED ADOLESCENT YOUTH IN UGANDA. Journal of Adolescent Health, 46, 372–378. DOI: https://doi.org/10.1016/j.jadohealth.2009.08.010
Tchakoute Tchuigoua, H. (2015). DETERMINANTS OF THE GOVERNANCE QUALITY OF MICROFINANCE INSTITUTIONS. The Quarterly Review of Economics and Finance, 58, 32-43. doi:10.1016/j.qref.2015.02.011 DOI: https://doi.org/10.1016/j.qref.2015.02.011
van Rooyen, C., Stewart, R., & de Wet, T. (2012). THE IMPACT OF MICROFINANCE IN SUB-SAHARAN AFRICA: A SYSTEMATIC REVIEW OF THE EVIDENCE. World Development, 40(11), 2249-2262. doi:10.1016/j.worlddev.2012.03.012 DOI: https://doi.org/10.1016/j.worlddev.2012.03.012
Wakoko, F. (2004). MICROFINANCE AND WOMEN’S EMPOWERMENT IN UGANDA: A socioeconomic approach. (Ph.D. Thesis), Ohio State University.
Wijesiri, M. (2016). WEATHERING THE STORM: OWNERSHIP STRUCTURE AND PERFORMANCE OF MICROFINANCE INSTITUTIONS IN THE WAKE OF THE GLOBAL FINANCIAL CRISIS. Economic Modelling, 57, 238-247. doi:10.1016/j.econmod.2016.05.011 DOI: https://doi.org/10.1016/j.econmod.2016.05.011
Wijesiri, M., & Meoli, M. (2015). PRODUCTIVITY CHANGE OF MICROFINANCE INSTITUTIONS IN KENYA: A BOOTSTRAP MALMQUIST APPROACH. Journal of Retailing and Consumer Services, 25, 115-121. doi:10.1016/j.jretconser.2015.04.004 DOI: https://doi.org/10.1016/j.jretconser.2015.04.004
Downloads
Published
How to Cite
Issue
Section
License
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.