How do microfinance and economic development mutually support each other? A Panel VAR approach in developing economies

Mehdi Mahmoudi () and Nicolae-Bogdan Ianc ()
Additional contact information
Mehdi Mahmoudi: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne
Nicolae-Bogdan Ianc: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, UVT - Universitatea de Vest din Timișoara [România] = West University of Timișoara [Romania] = Université Ouest de Timișoara [Roumanie]

Working Papers from HAL

Abstract: This paper explores the relationship between microfinance and economic development using a cross-country dataset of 60 developing countries from 2000-2018. We employ the Panel VAR model, estimated by the generalised method of moments (GMM). Microfinance institutions indicators are categorised into social and financial performance variables. Social performance variables include the number of clients served and the percentage of women borrowers, while financial performance indicators consist of the portfolio at risk, operational self-sufficiency, and operating expenses. Economic development is assessed using the Human Development Index, which integrates economic indicators like Gross National Income per capita with social indicators such as educational attainment and life expectancy at birth. We perform a Granger causality test confirming a Granger causal relationship between microfinance and economic development. Our findings indicate that shocks to social performance variables positively influence economic development, and shocks to financial performance variables significantly impact the human development index.

Keywords: Microfinance Economic development Granger causality Panel VAR HDI; Microfinance; Economic development; Granger causality; Panel VAR; HDI (search for similar items in EconPapers)
Date: 2025-01-14
Note: View the original document on HAL open archive server: https://hal.science/hal-04885573v1
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-04885573v1/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04885573

DOI: 10.5281/zenodo.14643940

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().