Micro-credit Access and Household Welfare in Rural Cameroon

Francis Menjo Baye

Chapter 6 in Promoting Microfinance, 2013, pp 103-131 from Palgrave Macmillan

Abstract: Abstract Microfinance is expected to help poor households generate income through micro-activities, smooth consumption, give them dignity and consequently enhance their wellbeing. Many studies have shown that by providing low-income households with access to financial services, their productivity, management skills and quality of life improve (Khandker, 1998; Zeiler, 2000; ADB, 2000; Parker and Nagarajan, 2001; Morduch and Haley, 2002). Unfortunately, because of the lack of collateral and high transaction costs, the poor and vulnerable cannot access formal bank credits (Pitt and Khandker, 1998; Khandker, 2003). Microfinance institutions (MFIs) have the potential to provide this missing link. The attention on microfinance and its role in reducing poverty was further amplified when Mohammad Yunus received the 2006 Nobel Peace Prize. According to the Nobel Committee, microfinance can help people to break out of poverty, which in turn is seen as an important prerequisite to establishing long-lasting peace (Norwegian Nobel Committee, 2006).

Keywords: Poor Household; Poverty Reduction; Credit Market; Sample Selection Bias; Mills Ratio (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-03491-5_6

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DOI: 10.1057/9781137034915_6

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