What macro factors make microfinance institutions reach out?

Annabel Vanroose
Savings and Development Vol. 32(2008), No. 3, pp. 153-174

This paper identifies factors that explain why microfinance institutions are reaching more clients in some countries than in others. To that end, the paper applies a cross-country analysis on a unique dataset covering 115 countries. Results indicate that the microfinance sector is more present in the richer countries of the developing world. It also reaches more clients in countries that receive more international support. Population density plays a positive role, which could in part explain why the sector is still underdeveloped in rural areas. The level of industrialisation and inflation do not seem to influence microfinance outreach, while regional dummies do.

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Issue: 2008 XXXII 3
Contributors: Vanroose, Annabel   
Keywords: , , ,