Microcredit and Economic Welfare: Experience of Poor Rural Households from Pakistan

Latif, Waqas Umar; Ullah, Sana; Ahmed, Wasim; Sultan, Muhammad Umar; Jafar, Rana Muhammad Sohail; Tariq, Muhammad; Wang, Linping

doi:10.1002/jid.3487

Cited by 7 publications

(7 citation statements)

References 47 publications

(52 reference statements)

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“…The 10 items (DFC) and 13 items (LI) are potential constructs to quantify the economic welfare shock. And this is in line with the assertion of Ravallion (1996), Latif et al. (2020) that welfare is not definite; therefore, literature has succumbed to proxies like income and food consumption.…”

Section: Literature Reviewsupporting

confidence: 78%

“…As shown in Tables 1 and 2, the DFC and LI pulled from the economic welfare module out of the seven modules of conflict exposure modules developed by Br€ uck et al (2013). The economic welfare module comprises three dimensions (LI, loss of assets and DFC); based on the content validity, loss of assets are considered to be part of the LI, as loss of (1996), Latif et al (2020) that welfare is not definite; therefore, literature has succumbed to proxies like income and food consumption.…”

Section: Literature Reviewmentioning

confidence: 99%

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Validating second-order model for economic welfare scale: evidence from Nigeria

Babangida

Hakim

Abdullah

2022

IJSE

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PurposeThe goal of this paper is to validate the second-order model for the economic welfare scale in the context of violence. This study also aims to assess the relationship between the dimensions of the economic welfare scale’ declining food consumption and loss of income and the overall latent construct and assess the second-order model’s goodness of fit using appropriate fit indices.Design/methodology/approachThe study is cross-sectional with a sample of 600 households from the violent zone, Northwest Nigeria. The data collected was used for confirmatory factor analysis, second-order model evaluation and model fit evaluation.FindingsThe second-order model for the economic welfare scale is valid and reliable; the dimensions significantly affect the formation of the overall construct. The model’s goodness of fit fulfilled the relevant fit indices.Research limitations/implicationsThe study offers researchers and policymakers practical insights into how each dimension influences the latent operational construct. It, therefore, encompasses replication in all the remaining modules.Practical implicationsThe findings offer practical insight to policymakers in designing policies for promoting long-term peace structures and developing mechanisms to assist those who have suffered the greatest economic welfare losses due to violence in Nigeria.Social implicationsThe findings form an essential tool to assess the economic welfare effect in violently affected territories at the micro-level.Originality/valueThe outcomes are ground-breaking by validating the second-order model for the economic welfare scale. And established dimension influences over the overall latent variable.

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Section: Literature Reviewsupporting

confidence: 78%

Section: Literature Reviewmentioning

confidence: 99%

Validating second-order model for economic welfare scale: evidence from Nigeria

Babangida

Hakim

Abdullah

2022

IJSE

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“…Similarly, Nelson (2007) considers household economic status amongst the essential factors mediating the impact of microcredit on intended outcomes. In the quest for the economic welfare impact of microcredit access to rural households in Pakistan, Latif et al (2020) found the effect of microcredit to differ with household economic status. The study discovered that microcredit mainly benefitted borrowers from households with relatively more robust financial conditions than those in deprived and low-income families.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Microcredit and women entrepreneurial success: a moderated mediation effect of household economic status

Tundui,

Tundui

2024

IJSSP

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PurposeThis paper examines whether household economic status mediates the effect of microcredit on entrepreneurial success amongst women microcredit clients and if this effect is conditional on the borrower’s marital status.Design/methodology/approachThis cross-sectional study uses primary data collected through a structured questionnaire from microcredit borrowers in Tanzania. The selection of the respondents for the survey involved categorising them based on their loan amount and length of membership in the program and randomly picking them for study participation. To realise the study objective, we used the moderated mediation model and employed the Linear-Based Regression Model 8 of the Hayes PROCESS macro V4.1 for SPSS.FindingsThe findings show that the loan amount and household economic status positively and significantly affect entrepreneurial success. However, the effect of microcredit on entrepreneurial success is mediated by household economic status. On the other hand, the direct and indirect effects of microcredit on entrepreneurial success differ depending on the borrowers' marital status, with married borrowers being negatively affected.Originality/valueMicrofinance supporters suggest that microcredit is vital for enterprise development and other socioeconomic outcomes. However, the results are inconclusive, including the role of household economic status. This study provides empirical insights into the moderated mediation effect of household economic status on the relationship between microcredit and entrepreneurial success. The study’s findings and limitations suggest considering not only microcredit and related factors but also the essential role of family factors in future research and design of microfinance services in efforts to support and grow microcredit-assisted women-owned businesses.

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“…The reasons behind the increment in consumption expenditure are the use of nutritious foods and educational and health expenses. Several studies found a positive effect of microcredit on the livelihood status of clients (Siyoum et al, 2012;Luqman, 2016;Latif et al, 2020;Sahu et al, 2021;Mazumder, 2022).…”

Section: Inferential Analysismentioning

confidence: 99%

“…,Crépon (2011),Al- Mamun et al (2014),Latif et al (2020), andDhungana and Ranabhat (2022) found significant effects of microfinance services on the saving habits of clients.…”

mentioning

confidence: 97%

Effects of Microfinance Services on Economic Status Improvement: A Case of SKBBL, Pokhara, Nepal

Dhungana

2022

QJMSS

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Background: Microfinance is an effective tool for financial inclusion and poverty reduction in developing countries like Nepal. It delivers financial and non-financial services to unbanked people from formal financial services. Microfinance services support people from weaker sections of society with a view of socio-economic transformation. Low access to finance is a problem for poor and marginalized people. Microfinance institutions provide microcredit to unbanked people without physical collateral. Thus they help people from lower-income groups improve their livelihood through productive investment. Objectives: This paper aims to examine the effects of microfinance services on the economic status of clients' status with references to Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited (SKBBL), Pokhara, Nepal. Methods: The research presents the findings of data collected through a survey research design in the Kaski district of Nepal. The researchers administered the survey questionnaire to 235 clients of SKBBL microfinance institutions involved in the programme for the last five or more years. We used a stratified random sampling technique to collect the data. The sample population comprised 70 from a scheduled caste (Dalit), 75 from ethnic groups, and 90 from upper castes. Both descriptive and inferential statistics have been used to analyze the data. The paired sample t-test has been used to examine the effects of microfinance intervention on occupational status, income level, consumption expenditure, capital expenditure, and monthly savings of the clients. Results: The results show that microfinance has contributed a significant role. It has enabled people from lower income groups to access microcredit and encourage productive investment that facilitates productive investment and economic transformation. -The result derived from paired sample t-test finds the positive effects of microfinance intervention on occupational status, income level, consumption, capital expenditure, and saving habits. Conclusion: This study concludes that role of microcredit is significant in enhancing the clients' economic status. Microfinance positively affects clients' earnings, savings, spending, asset accumulation, and occupational status. However, utilizing microcredit in productive sectors is necessary to empower the clients' economic status. The findings indicate that microfinance institutions must focus on effective microcredit applications to help create micro-businesses and improve the clients' livelihood status.

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Microcredit and Economic Welfare: Experience of Poor Rural Households from Pakistan

Cited by 7 publications

References 47 publications

Validating second-order model for economic welfare scale: evidence from Nigeria

Validating second-order model for economic welfare scale: evidence from Nigeria

Microcredit and women entrepreneurial success: a moderated mediation effect of household economic status

Effects of Microfinance Services on Economic Status Improvement: A Case of SKBBL, Pokhara, Nepal

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