An Impact Analysis of Microfinance in Bosnia and Herzegovina

Valentina Hartarska () and Denis Nadolnyak ()

No wp915, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan Stephen M. Ross Business School

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.

Keywords: microfinance; impact study; Microfinance Institutions; financing constraints; Eastern Europe; Bosnia and Herzegovina (search for similar items in EconPapers)
JEL-codes: G21 G11 O16 P20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mfd and nep-tra
Date: 2007-12-01
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Persistent link: http://EconPapers.repec.org/RePEc:wdi:papers:2008-915

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