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Socio-economic Perspective of Microfinance as a poverty reduction tool

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Listed:
  • Jaffery, Ada
  • Mamoon, Dawood

Abstract

This paper aims to critically evaluate the microfinance approach in social and economic perspective. Critical analysis reveals that microfinance can be used as an efficient tool to reduce poverty, thus contributing towards economic as well as social development. Moreover, paper highlights the role of institutional design and indicates that microfinance institutions working on the lines of non government organizations and following the double bottom line approach performs better than the other institutional frameworks. Joint liability and the role of group leader are eminent in enhancing the performance of these institutions. Poverty can be decreased if microfinance institutions are driven in a more systematic manner keeping in mind primarily the well being of society.

Suggested Citation

  • Jaffery, Ada & Mamoon, Dawood, 2015. "Socio-economic Perspective of Microfinance as a poverty reduction tool," MPRA Paper 81485, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:81485
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    References listed on IDEAS

    as
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    3. Niels Hermes & Robert Lensink, 2007. "The empirics of microfinance: what do we know?," Economic Journal, Royal Economic Society, vol. 117(517), pages 1-10, February.
    4. Khalid Mustafa & Zulfiqar Ahmad Gill & Toseef Azid, 2000. "NGOs, Micro-finance and Poverty Alleviation: Experience of the Rural Poor in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 771-792.
    5. B Gutiérrez-Nieto & C Serrano-Cinca & C Mar Molinero, 2009. "Social efficiency in microfinance institutions," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(1), pages 104-119, January.
    6. Paxton, Julia & Graham, Douglas & Thraen, Cameron, 2000. "Modeling Group Loan Repayment Behavior: New Insights from Burkina Faso," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 639-655, April.
    7. Chowdhury, Prabal Roy, 2005. "Group-lending: Sequential financing, lender monitoring and joint liability," Journal of Development Economics, Elsevier, vol. 77(2), pages 415-439, August.
    8. Marco Tavanti, 2013. "Before Microfinance: The Social Value of Microsavings in Vincentian Poverty Reduction," Journal of Business Ethics, Springer, vol. 112(4), pages 697-706, February.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Microfinance; Poverty; Social and Economic Development; Institutional Design; Non Government Organizations.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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