<abstract xmlns="http://www.w3.org/1999/xhtml">

<bold>Aim/purpose</bold> – Studying the impact of microfinance on income inequality from a macro- -economic perspective.
<bold>Design/methodology/approach</bold> – Cross-sectional regression analysis is used to measure the effect of microfinance on the Gini index in a sample of 30 developing countries from across Africa, Asia, Latin America, and Europe. A set of control variables are added to the model including: inflation, educational attainment, democracy, population growth, percentage of arable land to strengthen the model’s reliability.
<bold>Findings</bold> – Results indicate that neither a positive nor a negative impact of microfinance on Gini index could be significantly proved for the sample countries.
<bold>Research implications/limitations</bold> – Due to lack of data availability, research is conducted on a small sample of 30 countries. Therefore, to obtain more generalisable results, it is recommended for future research to use a larger sample.
<bold>Originality/value/contribution</bold> – Microfinance is becoming a focal issue in alleviating poverty and inequality, and this paper’s main contribution is that it explores this matter from a macro-economic perspective by looking at the holistic impact of microcredit on a sample of developing countries. Hence, the paper provides further investigation and suggestions for a better implementation of microfinance policies.
</abstract>

Aim/purpose – Studying the impact of microfinance on income inequality from a macro- -economic perspective.
Design/methodology/approach – Cross-sectional regression analysis is used to measure the effect of microfinance on the Gini index in a sample of 30 developing countries from across Africa, Asia, Latin America, and Europe. A set of control variables are added to the model including: inflation, educational attainment, democracy, population growth, percentage of arable land to strengthen the model’s reliability.
Findings – Results indicate that neither a positive nor a negative impact of microfinance on Gini index could be significantly proved for the sample countries.
Research implications/limitations – Due to lack of data availability, research is conducted on a small sample of 30 countries. Therefore, to obtain more generalisable results, it is recommended for future research to use a larger sample.
Originality/value/contribution – Microfinance is becoming a focal issue in alleviating poverty and inequality, and this paper’s main contribution is that it explores this matter from a macro-economic perspective by looking at the holistic impact of microcredit on a sample of developing countries. Hence, the paper provides further investigation and suggestions for a better implementation of microfinance policies.

The effect of microfinance on income inequality: Perspective of developing countries

Department of Economics, Faculty of Management Technology

Journal of Economics and Management

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

Aim/purpose – Studying the impact of microfinance on income inequality from a macro- -economic perspective.
Design/methodology/approach – Cross-sectional...

The effect of microfinance on income inequality: Perspective of developing countries

Published Online: Jul 23, 2021

Page range: 40 - 62

Received: Jun 13, 2018

Accepted: Nov 09, 2018

DOI: https://doi.org/10.22367/jem.2019.35.03

Keywords
developing countries, income inequality, microcredit, microfinance

© 2019 Israa Ali Mahmoud Ali et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

The effect of microfinance on income inequality: Perspective of developing countries

Published Online: Jul 23, 2021

Page range: 40 - 62

Received: Jun 13, 2018

Accepted: Nov 09, 2018

DOI: https://doi.org/10.22367/jem.2019.35.03

Keywordsdeveloping countries, income inequality, microcredit, microfinance

© 2019 Israa Ali Mahmoud Ali et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License.

Keywords
developing countries, income inequality, microcredit, microfinance