Financial development and poverty in developing countries: a causal analysis

Pérez‐Moreno, Salvador

doi:10.1007/s00181-010-0392-5

Cited by 56 publications

(25 citation statements)

References 31 publications

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“…Finally, an improved financial sector can reduce vulnerability and minimise risk by providing mechanisms to absorb shocks that could 48 otherwise have adverse effects on long-term income prospects. A number of studies such as (Chemli, 2014;Odhiambo, 2009;Perez-Moreno, 2011) confirms the above proposition.…”

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confidence: 65%

The Impact of Microfinance on Household Livelihoods: Evidence from Rural Eritrea

Habte

Visser

Ocran

2017

Development Finance

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Eritrea, a relatively young African nation, is one of the least developed countries in the world. Its economy is predominantly dependent on subsistence agriculture and the level and magnitude of poverty is more severe in rural areas. The formal financial sector is underdeveloped, state-owned, far from being competitive, and limited in terms of depth and breadth as measured by the relevant financial sector development indicators. To address the limitations of the formal banking sector and to help fill the financing gap, and improve the general livelihood of those at the lower income group, the Government of Eritrea introduced a Saving and Microcredit Programme (SMCP) in 1996 for which no scientific study measuring its impact has been done at the household level. The study was conducted in rural areas to find out whether the SMCP as a microfinance institution has improved the livelihood of its clients. The specific objectives of the study were to describe the characteristic feature of rural livelihoods in terms of the resources owned, the strategies pursued and outcomes achieved, identify and examine the determinants of household participation in the SMCP and finally assess the impact of participation in SMCP on household livelihoods. The study employed a quasi-experimental cross-sectional survey design involving structured and semistructured questionnaire administered to 500 respondents of whom 200 represented the treated group and 300 the controlled group. Logit regression was employed to identify the factors that determine household participation in the SMCP. In regard to this, age of the client household, household size, marital status, level of education of the client household, the size of first round loan, entrepreneurial experience, type of loan product offered by the institution, ownership of livestock and microenterprise, the perception of the client on involuntary deposits, the occurrence of a negative events (shock) to the household and village access to electricity were found to have statistically significant effect on the household"s probability to participate in the SMCP. Furthermore, the marginal effects were also computed to evaluate the contribution of each of these factors to the likelihood of participating in the SMCP. A propensity score matching model was applied to assess the impact of the programme on the livelihood of its clients. The findings reveal that participation in the SMCP has a significantly higher average treatment effect on the treated (ATT) households.Profits generated from off-farm and small microenterprises, the values of household and livestock assets, food and non-food consumption expenditures and nutrition quality, were ii found to be on average higher for the treated households than for the controlled households.

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confidence: 65%

The Impact of Microfinance on Household Livelihoods: Evidence from Rural Eritrea

Habte

Visser

Ocran

2017

Development Finance

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“…Financial globalization and the widespread consensus on the positive interplay between growth and development of the financial sector incited scholars to research the influence that improvements within the financial sector have on inequality and poverty. Positions in academic literature have generally suggested that improvements in the financial sector contribute to poverty alleviation (Beck et al, 2004;Jalilian and Kirkpatrick, 2005;Perez-Moreno, 2011;Sehrawat and Giri, 2016). However, the findings on finance-inequality have remained inconclusive.…”

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confidence: 99%

Trade Openness, Inequality and Poverty in Latin American Countries

Bayar¹,

Sart²

2017

ECO

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Abstract. Globalization has quickened, especially during the past three decades, due to technological, institutional, legal and political developments in the world. During this process, many countries reduced or removed the barriers on the cross-country flows of goods, services and capital, and the global trade volume increased substantially. Therefore, openness-oriented policies have led many social and economic implications for the national economies. In this regard, this study investigates the interaction among trade openness, poverty alleviation and inequality in 11 Latin American countries by employing a panel data analysis. We revealed that trade openness and financial development affected inequality and poverty negatively in the long term, while inequality affected poverty positively.

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“…In recent years an increasing body of the literature has focused on pinpointing the factors underlying poverty alleviation. A number of empirical papers have investigated the impact of financial development on the incidence of poverty (Honohan, 2004;Beck et al, 2007;Akteret al, 2010;Perez-Moreno, 2011;Jeanneney and Kpodar, 2011). 1 Other authors have analysed the linkage between financial development and poverty within single countries (e.g.…”

Section: Introductionmentioning

confidence: 99%

Financial development, institutions, and poverty alleviation: an empirical analysis

Cepparulo¹,

Cuestas

Intartaglia

2016

Applied Economics

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The aim of this paper is to empirically analysewhether the level of institutional quality influences the effect of financial development on poverty for a sample of developing countries covering the period from 1984 to 2012, or not. Using an interaction term constructed as a product between financial development and institutional qualitywe find that the pro-poor impact of financial development decreases as the quality of institution rises. Such differential effect can be ascribed to the capacity of banks to provide functions that mimic those performed by a wellworking institutional framework.The results of this paper can be used for policy management.

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Financial development and poverty in developing countries: a causal analysis

Abstract: Poverty, Financial development, Causality, Developing countries, O16, I32, C23,

Cited by 56 publications

References 31 publications

The Impact of Microfinance on Household Livelihoods: Evidence from Rural Eritrea

The Impact of Microfinance on Household Livelihoods: Evidence from Rural Eritrea

Trade Openness, Inequality and Poverty in Latin American Countries

Financial development, institutions, and poverty alleviation: an empirical analysis

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