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An Impact Analysis of Microfinance in Bosnia and Herzegovina

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  • Valentina Hartarska

    ()

  • Denis Nadolnyak

    ()

Abstract

This paper applies the financing constraint approach to study whether microfinance institutions improved access to credit for microenterprises in Bosnia and Herzegovina. According to this approach, microenterprises with improved assess to credit rely less on internal funds for their investments. Thus, we compare investment sensitivity to internal funds of micorenterprises in municipalities with significant presence of MFIs to that of micorenterprises in municipalities with no (or limited) presence of MFIs using Living Standards Measurement Survey and MFI branch location data. Results indicate that MFIs alleviated microbusinesses??? financing constraint. This approach is applicable to evaluating microfinance impact in other countries.

Suggested Citation

  • Valentina Hartarska & Denis Nadolnyak, 2007. "An Impact Analysis of Microfinance in Bosnia and Herzegovina," William Davidson Institute Working Papers Series wp915, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2008-915
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/64359/1/wp915.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    microfinance; impact study; Microfinance Institutions; financing constraints; Eastern Europe; Bosnia and Herzegovina;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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