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Success’ Conditions of Microfinance to Fostering Sustainable Development

Author

Listed:
  • Mongi Lassoued

Abstract

With a loan portfolio estimated at $124.1 billion in 2018, 139.9 million borrowers benefited from microfinance services, compared to just 98 million in 2009 (World Bank Group, 2018). Despite a low quality portfolio and high borrowers' costs, the portfolio in the Middle East and North Africa (MENA) shows a remarkable increase of 20% but with a decrease of 6.6 points (Microfinance Barometer, 2019). Most of empirical studies have focused on the issue of microfinance, and research conducted on the effectiveness of microcredit is surprisingly scarce or even non-existent in the MENA region. In addition, microcredit could lead to sustainable development in the region via an income effect. The main objective of this paper is to determine the impact of microcredit on sustainable development for 10 selected MENA countries over the period 1990-2018. Empirical results paradoxically show a negative effect of microcredit on sustainable development. Although, the limitations of data, the present paper also contributes to the existing literature by advising conditions for the success of microcredit aiming for a better promotion of sustainable development.

Suggested Citation

  • Mongi Lassoued, 2021. "Success’ Conditions of Microfinance to Fostering Sustainable Development," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(1), pages 1-22, January.
    • Handle: RePEc:ibn:ijefaa:v:13:y:2021:i:1:p:22
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    References listed on IDEAS

    as
    1. Ashim Kumar Kar, 2017. "Income Smoothing, Capital Management and Provisioning Behaviour of Microfinance Institutions: A Study Using Global Panel Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 108-126, January.
    2. repec:wbk:wbpubs:12426 is not listed on IDEAS
    3. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12425, April.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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