Microfinance and Economic Development
Microfinance is generally seen as a way to fix credit markets and unleash the productive capacities of poor people who are dependent on self-employment. The microfinance sector has grown quickly since the 1990s, paving the way for other forms of so...
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| Language: | English |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/107171511360386561/Microfinance-and-economic-development http://hdl.handle.net/10986/28913 |
| Summary: | Microfinance is generally seen as a way
to fix credit markets and unleash the productive capacities
of poor people who are dependent on self-employment. The
microfinance sector has grown quickly since the 1990s,
paving the way for other forms of social enterprise and
social investment. But recent evidence shows only modest
average impacts on customers, generating a backlash against
microfinance. This paper reconsiders the claims about
microfinance, highlighting the diversity in evidence on
impacts and the important (but limited) role of subsidies.
The paper concludes by describing an evolution of thinking:
from microfinance as narrowly construed entrepreneurial
finance toward microfinance as broadly construed household
finance. In this vision, microfinance yields benefits by
providing liquidity for a wide range of needs rather than
solely by boosting business income. |
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