Economics of Microcredit-From current crisis to new possibilities

Jeremiah Mitoko

MPRA Paper from University Library of Munich, Germany

Abstract: Following the United Nations declaration of 2005 as the International Year of Microcredit, international organizations began to promote a tighter regulatory and supervisory framework for the microcredit industry. In this paper, I review the theoretical basis of this development considering recent empirical findings that microcredit programs tend to have initial success yet demonstrate few significant benefits beyond two years. I utilize an agent-based simulation as an ex-ante policy assessment tool to examine a tighter regulatory strategy. My findings for Kenya, with possible application to other developing countries and regions, suggest that a less rigid regulatory framework is more likely to lead to more sustained positive impacts than this emulation strategy.

Keywords: Microcredit; Financial; Development; Agent-based; Models; Financial; Crises; –; Causes; of; Financial; Crises; –; Research; Government; Policy; and; Regulation (search for similar items in EconPapers)
JEL-codes: E5 F63 G01 G21 O23 O55 (search for similar items in EconPapers)
Date: 2021-06-21
New Economics Papers: this item is included in nep-cwa, nep-fdg, nep-mac and nep-mfd
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108392

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