Does microfinance program innovation reduce income inequality? Cross-country and panel data analysis

Artikel

This paper uses cross-country and panel data set to test the significance of microfinance on income inequality reduction at the macro level for a sample of 57 developing countries for the periods 2000-2006 and 2007-2013. This study adopts panel data methodologies, such as ordinary least square (OLS), pooled ordinary least square (POLS) and instrumental variables (IV) estimations to overcome the endogeneity problems among the variables. Empirical results show that countries with higher MFIs' gross loan portfolio per capita tend to have lower income inequality, which confirm the beneficial outcome of microfinance in reducing inequality at the macro level. Moreover, our results suggest that microfinance loans can lead to improve the relative income position of the poor in developing countries, albeit slowly. Our findings have relevant recommendations to policymakers, as they could generate suitable strategies to consider microfinance institutions as a more popular tool for fighting against both poverty and inequality.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Innovation and Entrepreneurship ; ISSN: 2192-5372 ; Volume: 11 ; Year: 2022 ; Issue: 1 ; Pages: 1-15 ; Heidelberg: Springer

Classification and Topics

• Classification: Management ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Measurement and Analysis of Poverty ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: Income inequality ; Instrumental variables ; Loan portfolio ; Macro-level analysis ; Microfinance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Miled, Kamel Bel Hadj ; Younsi, Moheddine ; Landolsi, Monia
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2022

Further information

• DOI: doi:10.1186/s13731-022-00195-7
• Handle: http://hdl.handle.net/10419/259669