IDEAS home Printed from https://ideas.repec.org/a/pal/compes/v64y2022i1d10.1057_s41294-021-00145-4.html
   My bibliography  Save this article

Microfinance, Poverty and Education

Author

Listed:
  • Asma Boussetta

    (Univ. Orléans, CNRS, LEO, FRE 2014
    Université de Tunis El Manar)

Abstract

This paper studies the relationship between microfinance, education and poverty at the macrolevel using a cross-country panel dataset of 116 countries over the period of 1999–2018. Disaggregating the effects by income levels and taking account of the potential problem of endogeneity related to microfinance institutions’ loans, this analysis reveals that any increase in the size of the gross loan portfolio of MFIs leads to a reduction in poverty in high- and middle-income economies. Moreover, I show that there is no significant relationship between microfinance and poverty in countries with lower levels of income. I also examine the channels through which microfinance affects poverty and find that any increase in the size of the microfinance sector fosters education which, in turn, reduces poverty.

Suggested Citation

  • Asma Boussetta, 2022. "Microfinance, Poverty and Education," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 86-108, March.
    • Handle: RePEc:pal:compes:v:64:y:2022:i:1:d:10.1057_s41294-021-00145-4
    DOI: 10.1057/s41294-021-00145-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41294-021-00145-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41294-021-00145-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Asad K. Ghalib & Issam Malki & Katsushi S. Imai, 2015. "Microfinance and Household Poverty Reduction: Empirical Evidence from Rural Pakistan," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 84-104, March.
    2. José De Gregorio & Jong–Wha Lee, 2002. "Education and Income Inequality: New Evidence From Cross‐Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
    3. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    4. Coen Teulings & Thijs van Rens, 2008. "Education, Growth, and Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 89-104, February.
    5. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    6. Imai, Katsushi S. & Gaiha, Raghav & Thapa, Ganesh & Annim, Samuel Kobina, 2012. "Microfinance and Poverty—A Macro Perspective," World Development, Elsevier, vol. 40(8), pages 1675-1689.
    7. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    8. Cull, Robert & Demirgüç-Kunt, Asli & Morduch, Jonathan, 2011. "Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?," World Development, Elsevier, vol. 39(6), pages 949-965, June.
    9. Jinyong Hahn & Jerry Hausman & Guido Kuersteiner, 2004. "Estimation with weak instruments: Accuracy of higher-order bias and MSE approximations," Econometrics Journal, Royal Economic Society, vol. 7(1), pages 272-306, June.
    10. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1577-1625.
    11. Zeller, Manfred & Sharma, Manohar & Henry, Carla & Lapenu, Cecile, 2006. "An operational method for assessing the poverty outreach performance of development policies and projects: Results of case studies in Africa, Asia, and Latin America," World Development, Elsevier, vol. 34(3), pages 446-464, March.
    12. Navajas, Sergio & Schreiner, Mark & Meyer, Richard L. & Gonzalez-vega, Claudio & Rodriguez-meza, Jorge, 2000. "Microcredit and the Poorest of the Poor: Theory and Evidence from Bolivia," World Development, Elsevier, vol. 28(2), pages 333-346, February.
    13. Rodgers, Gerry., 1983. "Population growth, poverty and inequality in an international perspective," ILO Working Papers 992216793402676, International Labour Organization.
    14. Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," The World Bank Economic Review, World Bank, vol. 19(2), pages 263-286.
    15. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," The World Bank Economic Review, World Bank Group, vol. 19(1), pages 21-44.
    16. Robert Cull & Asli Demirguç-Kunt & Jonathan Morduch, 2007. "Financial performance and outreach: a global analysis of leading microbanks," Economic Journal, Royal Economic Society, vol. 117(517), pages 107-133, February.
    17. Niels Hermes, 2014. "Does microfinance affect income inequality?," Applied Economics, Taylor & Francis Journals, vol. 46(9), pages 1021-1034, March.
    18. George R. G. Clarke & Lixin Colin Xu & Heng‐fu Zou, 2006. "Finance and Income Inequality: What Do the Data Tell Us?," Southern Economic Journal, John Wiley & Sons, vol. 72(3), pages 578-596, January.
    19. Jean-Yves Duclos & Abdelkrim Araar, 2006. "Poverty and Equity," Economic Studies in Inequality, Social Exclusion, and Well-Being, Springer, number 978-0-387-33318-2, Fall.
    20. John Weiss & Heather Montgomery, 2005. "Great Expectations: Microfinance and Poverty Reduction in Asia and Latin America," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 391-416.
    21. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
    22. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    23. P. Mosley, 2001. "Microfinance and Poverty in Bolivia," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 101-132.
    24. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    25. Lansana Bangoura & Momar Khary Mbow & Albert Lessoua & Diadié Diaw, 2016. "Impact of Microfinance on Poverty and Inequality A Heterogeneous Panel Causality Analysis," Revue d'économie politique, Dalloz, vol. 126(5), pages 789-818.
    26. Lønborg, Jonas Helth & Rasmussen, Ole Dahl, 2014. "Can Microfinance Reach the Poorest: Evidence from a Community-Managed Microfinance Intervention," World Development, Elsevier, vol. 64(C), pages 460-472.
    27. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    28. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    29. Huck-ju Kwon & Eunju Kim, 2014. "Poverty Reduction and Good Governance: Examining the Rationale of the Millennium Development Goals," Development and Change, International Institute of Social Studies, vol. 45(2), pages 353-375, March.
    30. Zhang Quanda, 2017. "Does microfinance reduce poverty? Some international evidence," The B.E. Journal of Macroeconomics, De Gruyter, vol. 17(2), pages 1-13, June.
    31. Hongyi Li & Heng-fu Zou, 2002. "Inflation, Growth, and Income Distribution: A Cross-Country Study," Annals of Economics and Finance, Society for AEF, vol. 3(1), pages 85-101, May.
    32. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    33. Castañeda, Andrés & Doan, Dung & Newhouse, David & Nguyen, Minh Cong & Uematsu, Hiroki & Azevedo, João Pedro, 2018. "A New Profile of the Global Poor," World Development, Elsevier, vol. 101(C), pages 250-267.
    34. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, March.
    35. Yang, Juan & Qiu, Muyuan, 2016. "The impact of education on income inequality and intergenerational mobility," China Economic Review, Elsevier, vol. 37(C), pages 110-125.
    36. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    37. Abdul Abdullah & Hristos Doucouliagos & Elizabeth Manning, 2015. "Does Education Reduce Income Inequality? A Meta-Regression Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 301-316, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas CHUFFART & Marie-Line DUBOZ & Paipet Corine ZOGBE, 2023. "Microfinance, inclusion financière et inégalités de revenus dans l’UEMOA," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 58, pages 103-121.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kamel Bel Hadj Miled & Moheddine Younsi & Monia Landolsi, 2022. "Does microfinance program innovation reduce income inequality? Cross-country and panel data analysis," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-15, December.
    2. Imai, Katsushi S. & Gaiha, Raghav & Thapa, Ganesh & Annim, Samuel Kobina, 2012. "Microfinance and Poverty—A Macro Perspective," World Development, Elsevier, vol. 40(8), pages 1675-1689.
    3. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    4. Martin Ravallion, 2013. "The Idea of Antipoverty Policy," NBER Working Papers 19210, National Bureau of Economic Research, Inc.
    5. Ravallion, Martin, 2006. "Looking beyond averages in the trade and poverty debate," World Development, Elsevier, vol. 34(8), pages 1374-1392, August.
    6. Maricruz Lacalle†Calderon & Manuel Perez†Trujillo & Isabel Neira, 2018. "Does Microfinance Reduce Poverty among the Poorest? A Macro Quantile Regression Approach," The Developing Economies, Institute of Developing Economies, vol. 56(1), pages 51-65, March.
    7. Cong Minh Huynh & Nam Hoai Tran, 2023. "Financial development, income inequality, and institutional quality: A multi-dimensional analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2242128-224, June.
    8. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    9. Montalbano, Pierluigi, 2011. "Trade Openness and Developing Countries' Vulnerability: Concepts, Misconceptions, and Directions for Research," World Development, Elsevier, vol. 39(9), pages 1489-1502, September.
    10. Philipp Heimberger, 2019. "Beeinflusst die ökonomische Globalisierung die Einkommensungleichheit? Eine Meta-Analyse," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 45(4), pages 497-529.
    11. Inoue, Takeshi & Hamori, Shigeyuki, 2010. "How has financial deepening affected poverty reduction in India? : empirical analysis using state-level panel data," IDE Discussion Papers 249, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    12. Stimpfle, Alexander & Stadelmann, David, 2015. "The Impact of Fundamental Development Factors on Different Income Groups: International Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113128, Verein für Socialpolitik / German Economic Association.
    13. Liyanaarachchi, Tilak S. & Naranpanawa, Athula & Bandara, Jayatilleke S., 2016. "Impact of trade liberalisation on labour market and poverty in Sri Lanka. An integrated macro-micro modelling approach," Economic Modelling, Elsevier, vol. 59(C), pages 102-115.
    14. Philipp Heimberger, 2020. "Does economic globalisation affect income inequality? A meta‐analysis," The World Economy, Wiley Blackwell, vol. 43(11), pages 2960-2982, November.
    15. Lønborg, Jonas Helth & Rasmussen, Ole Dahl, 2014. "Can Microfinance Reach the Poorest: Evidence from a Community-Managed Microfinance Intervention," World Development, Elsevier, vol. 64(C), pages 460-472.
    16. Gourdon, Julien, 2006. "Openness and Inequality in Developing Countries: A New Look at the Evidence," MPRA Paper 4176, University Library of Munich, Germany.
    17. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208.
    18. Hisaki KONO & Kazushi TAKAHASHI, 2010. "Microfinance Revolution: Its Effects, Innovations, And Challenges," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 15-73, March.
    19. Mario La Torre & Helen Chiappini (ed.), 2020. "Contemporary Issues in Sustainable Finance," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-40248-8, December.
    20. Muhammad Shahbaz & Mita Bhattacharya & Mantu Kumar Mahalik, 2017. "Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions," Applied Economics, Taylor & Francis Journals, vol. 49(52), pages 5337-5351, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:compes:v:64:y:2022:i:1:d:10.1057_s41294-021-00145-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.