Date of Award

2010

Document Type

Campus Access Thesis

Department

Moore School of Business

Sub-Department

Economics

First Advisor

John McDermott

Second Advisor

Jan Breuer

Abstract

Microfinance is a rapidly growing movement that has quickly spread from hundreds of microfinancial institutions (MFI's) to thousands, with the overall yearly micro-loan amount in the billions of dollars as of 2009. Many researchers caution that the impact of microfinance on poverty is expected to be small, but still make the argument that microfinance does indeed have its place in poverty alleviation. Moreover, while microfinance is a micro-level economic phenomenon, the world of microfinance has grown so significantly in the past 15 years, that it is useful to address the growing macro-level impact. The main focus of this paper is to determine the macro impact of microfinance on poverty, with a secondary focus on the importance of the internal structure and organization of an MFI. I find that the greater presence and success microfinance has in a country, the greater the impact on the poverty rate in that country. Also, specific institutional structure, organization and efficiency have a significant impact on the success of an MFI. Most of the reviewed literature presents theoretical analysis or research applied specifically to a small city or town in order to determine the impact an individual institution has on the surrounding population. Therefore, the goal of this paper is to further current research and utilize updated data in order to determine the significance and importance of microfinance.

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