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Household Allocation of Microfinance Loans in Kyrgyzstan

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  • Angioloni, Simone
  • Kudabaev, Zarylbek
  • Ames, Glenn
  • Wetzstein, Michael

Abstract

Within Kyrgyzstan, microfinance provides the largest source of credit for lowincome households. The allocation of these loans between current consumption and investment has a direct bearing on the impact these loans have on rural development. For investigating this allocation, a multivariate Probit model is developed and populated with borrowers’ loan allocations from 2006 to 2010. Key factors considered are education, gender, equipment ownership, and geographical region. Results indicate that the Naryn region has the largest impact on borrowers’ likelihood to allocate loans toward food and the smallest (negative) impact on the probability of starting a new business. Mobile phone and livestock ownership were identified as two key factors, which decreases borrowers’ probability of using loans to purchase food and increases the probability of agricultural investment or to start a business.

Suggested Citation

  • Angioloni, Simone & Kudabaev, Zarylbek & Ames, Glenn & Wetzstein, Michael, 2015. "Household Allocation of Microfinance Loans in Kyrgyzstan," 2015 Conference, August 9-14, 2015, Milan, Italy 210949, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:210949
    DOI: 10.22004/ag.econ.210949
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    Consumer/Household Economics; Financial Economics;

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