Microfinance and the Interaction of Macroeconomic Factors in Poverty Reduction

Abstract

Microfinance is known as a valuable tool for increasing the welfare and reducing the poverty. Due to lack of data, most studies on poverty alleviation are limited. However, recently there have been empirical studies that show the interaction of macroeconomic factors and of microfinance in poverty reduction. Micro-credit is modelled as a pure element of the microcredit market, which may increase the GPD in the long run. Following the studies of the previous work, the paper aims to test the hypothesis: the impact of macroeconomic factors and of microfinance on poverty reduction. The hypothesis' testing and evaluation is conducted through econometric estimation and through Eviews program.

DOI: 10.5901/ajis.2016.v5n2p209