Macroeconomic Effects of Microfinance: Evidence from Developing Countries

Charles Ficawoyi Donou-Adonsou and Kevin Sylwester
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Charles Ficawoyi Donou-Adonsou: University of Colorado-Denver
Kevin Sylwester: Southern Illinois University-Carbondale

Journal of Economic Insight, 2015, vol. 41, issue 1, 21-35

Abstract: This paper investigates the macroeconomic effects of microfinance loans. Using a sample size of 71 developing countries over 2002-2011, we find with the system generalized method of moments methodology that microfinance loan growth has a positive and significant effect on economic growth and total factor productivity. However, there is no strong evidence of microfinance loan growth on investment and education. Our results suggest that microfinance loans can lead to income growth in developing countries, albeit slowly.

JEL-codes: E2 G2 O1 O4 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:mve:journl:v:41:y:2015:i:1:p:21-35

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