Economic and Employment Effects of Microloans in a Transition Country
AbstractOver the last years, microloans to small and medium-sized enterprises have grown in significance in many countries of Central and Eastern Europe. Empirical evidence on the economic and social impact of microfinance is, however, scant. In trying to shed more light on this important issue, this paper uses a case study and analyzes the economic impacts of the microloan programme of the Latvian development bank Hipoteku Banka. We analyse a dataset provided by the Hipoteku Banka and use economic indicators of Latvia and its regions as comparisons. We find that the firms that were granted a loan from Hipoteku Banka on average considerably increased their employment during the loan period. In addition, a survey was carried among the clients of the bank. The survey results imply that the microloan program made a clear contribution to supporting existing firms and establishing new businesses, although the impact varies across sectors of economic activity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52736.
Date of creation: Jan 2014
Date of revision:
Microcredit; Employment; Economic Growth;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-01-10 (All new papers)
- NEP-MFD-2014-01-10 (Microfinance)
- NEP-TRA-2014-01-10 (Transition Economics)
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