Abstract:This study examines the relationship between microfinance and income inequality at the macro level using cross-country and panel data. We show that a country with higher MFIs’ gross loan portfolio per capita tends to have lower income inequality, which confirms the beneficial role of microfinance in reducing income inequality at the macro level. Our results suggest that microfinance loans can lead to improve the relative income position of the poor in developing countries, albeit slowly. In the light of the fo… Show more
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