Relative Price Stability, Creditor Rights, and Financial Deepening

Dehesa, Mario; Druck, Pablo; Plekhanov, Alexander

doi:10.2139/ssrn.1007888

Cited by 9 publications

(2 citation statements)

References 20 publications

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“…Microfinancial inclusion is explained by inflation indicating that low and stable inflation encourages economic activity viability thus reducing poverty. When the monetary system is relatively certain, economic activities like long-term contracts, savings and investments increased, leading to society well-being (Boyd et al , 2001; Dehesa et al , 2007). The inflation rate is expected to positively correlate poverty.…”

Section: Methodsmentioning

confidence: 99%

Microfinancial inclusion nexus poverty alleviation: the case of Nigeria

Ngong

Thaddeus

Onwumere

2021

JEAS

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PurposeThis research examines the long-run relationship between microfinancial inclusion and poverty alleviation in Nigeria from 1990 to 2018.Design/methodology/approachthe Engle–Granger two-step co-integration and autoregressive distributed lag (ARDL) techniques. Gross domestic product (GDP) per capita proxies poverty reduction. Number of microfinance banks, borrowers of microfinance institutions, commercial bank branches, commercial bank loan to small-scale businesses and broad money supply ratio measure microfinancial inclusion.FindingsThe results indicate a long-run relationship between microfinancial inclusion and poverty reduction. The error correction model reveals that microfinancial inclusion and poverty alleviation converge to long-run equilibrium. The number of microfinance banks, lagged value of borrowed funds and broad money supply negatively influences poverty while the lagged values of number of microfinance banks and broad money supply positively influence poverty.Research limitations/implicationsEffective ways to improve microcredit channels and liquidity flow to the poor through a microfinance bank's intermediation should be promoted by the Central Bank of Nigeria (CBN) using an aggressive policy, which provides access to credit to the poor.Practical implicationsTheoretically, microfinance institutions should increase credit to the poor, especially in rural areas at moderate cost. This study further suggests that many microfinance bank branches should be located in urban and rural areas targeting the poor.Social implicationsMicrofinancial inclusion reduces population's poverty in Nigeria and globally.Originality/valueContrary to other studies, this paper utilizes number of microfinance institutions and borrowers of microfinance institutions to examine the relationship between microfinancial inclusion and poverty alleviation in Nigeria.

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Section: Methodsmentioning

confidence: 99%

Microfinancial inclusion nexus poverty alleviation: the case of Nigeria

Ngong

Thaddeus

Onwumere

2021

JEAS

View full text Add to dashboard Cite

show abstract

“…[6] posits that an optimal measure of financial deepening must include the total amount of banking and nonbanking financial assets including domestic credit to the private sector, liquidity liabilities, stock and bond market capitalization, Treasury bill etc. In his study, [7] maintains that financial deepening indicator constitutes the ratio of private sector credit to gross domestic product (GDP). [8] equally considers ratio of private sector credit to GDP as a primary financial deepening measure, but also selected the money supply relative to GDP as an alternative indicator.…”

Section: Introductionmentioning

confidence: 99%