Does microfinance reduce poverty? New evidence from Northeastern Mindanao, the Philippines

Agbola, Frank W.; Acupan, Angelito B.; Mahmood, Amir

doi:10.1016/j.jrurstud.2016.11.005

Cited by 70 publications

(74 citation statements)

References 18 publications

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“…In the microfinance context, to the best of our knowledge, cluster analysis has never been used. There are several studies that analyse the external environment for MFI operations (Ahlin et al, ; Vanroose, , ; Vanroose & D'Espallier, ) and the economy‐wide effect of microfinance itself (Kai & Hamori, ; Imai et al, ; Hermes, ; Lopatta & Tchikov, , ; Lacalle‐Calderón et al, ; Donou‐Adonsou & Sylwester, ; Agbola et al, ). Most of these studies, however, exploit cross‐section or panel‐data analysis to find the macro‐institutional factors important for microfinance operations without explicit grouping or clustering.…”

Section: Methodsmentioning

confidence: 99%

“…Several other studies provide country‐specific evidence on the poverty reduction potential of microfinance, for example Mosley () in Bolivia, Imai and Azam () in Bangladesh, and Bruhn and Love (). Agbola, Acupan, and Mahmood () find a mildly positive impact of microfinance on poverty reduction and well‐being in the Philippines. Raihan, Osmani, and Khalily () analyse the macro impact of microfinance in Bangladesh and find that microfinance has affected the real economy, with the contribution to country GDP constituting between 8.9% and 11.9%; the contribution to rural GDP is found to be even higher.…”

Section: Literature Review: Micro and Macro‐level Impact Of Microfinancementioning

confidence: 99%

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The microfinance promise—can it be kept? A macro perspective

Alimukhamedova

2019

Development Policy Review

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After five decades of rapid expansion of microfinance worldwide, little is known about its aggregate effects and whether the “microfinance promise” of poverty reduction holds at the macro level. Challenging questions have arisen. Here we explore the dynamic response of microfinance on economic growth, financial deepening and income inequality. Countries are grouped into three broad clusters (stable, moderate and poor) based on macro‐institutional variables. Our results show that microfinance has a significant long‐term ability to affect the broader economy. However, the impact and dynamics of microfinance differ substantially across macro‐institutional environments. It grows in weaker environments, reaches its peak in developing economies, and then gradually “dies out” in more stable economies. While there is evidence of a positive impact of microfinance at the aggregate level, the response is different depending on whether countries are poor, moderately developed or economically stable. Once countries climb up the macro‐institutional “ladder,” microfinance can take a different shape and its relationship with other macroeconomic fundamentals can change. Our results indicate that microfinance has the strongest effect when the external environment is supportive and proactive; in weak environments, microfinance cannot grow sufficiently. Therefore, more attention should be given to supporting the socioeconomic dimensions of economies.

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Section: Methodsmentioning

confidence: 99%

Section: Literature Review: Micro and Macro‐level Impact Of Microfinancementioning

confidence: 99%

The microfinance promise—can it be kept? A macro perspective

Alimukhamedova

2019

Development Policy Review

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“…Maksimov et al (2016) the role of businesses in poverty alleviation in least developed countries (LDCS) countries is important to do with policy makers. Agbola et al (2017) found that microfinance had little positive impact on poverty reduction. Therefore, the importance of implementing strategies of policymakers to promote and create greater access to microfinance as a capability to reduce poverty improves the welfare of poor communities in the Philippines.…”

Section: Entrepreneurs Processmentioning

confidence: 99%

Analyzing The Entrepreneur Process of Motivation, Resource Allocation, and Institutional for Poor Households in Rural West Sumatera

Sentosa¹,

Ariusni²

2018

Proceedings of the First Padang International Conference on Economics Education, Economics, Business and Management, Accounting

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Poverty is a problem in the development of rural areas in the Province of West Sumatra. The government has implemented various programs to reduce poverty, but the number of poor people in rural areas tends to increase. The purpose of this study is to analyze the entrepreneur process in terms of: 1) motivation of sociology perspective, 2) allocation of resources, and 3) institutional role. The sampling method used was multistage cluster sampling. The sample size of poor household heads in rural areas was 133 people. Some important results of the study are as follows. First, the respondents' perception on motivation in terms of sociological perspective has an average value that is in good enough category. Motivation results have the highest average value compared with social motivation and economic motivation. Second, the respondents' perception on the entrepreneurial process in terms of allocation of resources is in good enough category. However, indicators of resource allocation and agglomeration strategies are in the bad category. Third, the average value of respondents' perception of entrepreneurial processes in terms of institutional roles is in fairly good category. The average value for the role of exploitation facilitation opportunities is in the less favorable category.The poor in rural areas mostly work in the agricultural sector (Sentosa, et al., 2016: World Bank, 2016. The cause of poverty from farmers is 50% by structuralistic, almost 30% by individualistic, and by 20% by hold fatalistic attitudes (Hayati and Karami, 2005). Chen et al (2011) found that poverty in rural areas is lack of information. Information needs of farmers are not met, farmers' information right cannot be realized properly. Then Baye (2017) found that rural poverty was due to the effect of religion and culture on the thinking and working habit of the people. Besides, poverty is caused by the presence of unproductive groups, lack of capital, lack of infrastructure, lack of market access, lack of skilled labor, land degradation, population pressure, religion, culture, forestry, regime and policy ownership and lack of land management practices. Some of the above findings can be seen that many factors are causing poverty for the rural population, so there is a need for poverty reduction programs that are relevant to poverty conditions. In the context of rural poverty reduction, rural poverty reduction programs have been and are being implemented by the Indonesian government especially the West Sumatera Provincial Government, such as:

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“…Khandker (2005) finds that borrowers' expenditure for food purposes increased significantly compared to non-borrowers. Since borrowers spend a major part of their income for food (Rahman & Ahmed, 2010), it is found by Agbola et al (2017) that per capita food expenditure differs significantly between borrowers and non-borrowers. The health of the members of borrower's household is found to have improved as the borrowers spend their income for treatment or health purposes (Agbola et al, 2017;Samer et al, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Since borrowers spend a major part of their income for food (Rahman & Ahmed, 2010), it is found by Agbola et al (2017) that per capita food expenditure differs significantly between borrowers and non-borrowers. The health of the members of borrower's household is found to have improved as the borrowers spend their income for treatment or health purposes (Agbola et al, 2017;Samer et al, 2015). Borrowers' housing condition is also found to have improved due to their increased ability to spend (Mazumder & Lu, 2015) and established borrowers are found to spend more for education purposes (Onyina & Turnell, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

Effect of Household Factors on Repayment Ability among Islamic Microfinance Borrowers in Bangladesh

Sharmin¹,

Bakar²

2018

IJBM

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The paper aims to discuss the effect of household factors on repayment ability among borrowers of Islamic microfinance in Bangladesh. Cross-sectional survey was used on borrowers who have been involved for more than two years in rural development scheme. Data was collected from 507 households through a close-ended questionnaire. The survey found that household income increased significantly after access to the Islamic microfinance program. The structural equation model analysis shows that household income has a significant positive effect on repayment ability. Household savings and consumption were also found to have a significant positive relationship with household income. Household savings also has a significant positive relationship with repayment ability when it is negative with the household consumption. Unlike conventional studies, this study found that borrowers involved in farm activities have a better repayment ability. The emerging result contributes to the research regarding repayment problems and the findings demonstrate that the adoption of Islamic microfinance could be a better solution. It is also anticipated that the empirical result will contribute to the furtherance of literature on Islamic microfinance.

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Does microfinance reduce poverty? New evidence from Northeastern Mindanao, the Philippines

Cited by 70 publications

References 18 publications

The microfinance promise—can it be kept? A macro perspective

The microfinance promise—can it be kept? A macro perspective

Analyzing The Entrepreneur Process of Motivation, Resource Allocation, and Institutional for Poor Households in Rural West Sumatera

Effect of Household Factors on Repayment Ability among Islamic Microfinance Borrowers in Bangladesh

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