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Microcredit as A Strategy for Employment Creation: A Systematic Review of the Literature

Author

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  • Djihad, Tria
  • Harun, Mukaramah
  • Alam, Md. Mahmudul

    (Universiti Utara Malaysia)

Abstract

National governments and their development partners have considered microcredit as a strategic tool for vulnerable populations. Easy access to finance increases the client's ability to invest and allows clients to use resources to change their behaviour, increase their business opportunities and create employment. This paper aims to review studies that focused on microcredit and employment issues affecting beneficiaries, including gender-based employment creation and the informal sector. Through a systematic search of electronic databases and keywords to identify relevant studies, 40 core articles are identified for the period 1998-2021. The results indicate the significant impacts of microcredit on women's employment creation and business revenue of microenterprises in the informal sector. Moreover, a few studies set out to integrate gender employment creation and the informal sector with reference to microcredit. A framework is proposed to address the relationship between employment structure and microcredit. Finally, this study recommends developing a financial social accounting matrix and run empirical analysis on macro modelling such as input-output or general equilibrium modelling. Doing so will help obtain better understanding of how microcredit participation is associated with employment creation in different sectors and different types of household groups.

Suggested Citation

  • Djihad, Tria & Harun, Mukaramah & Alam, Md. Mahmudul, 2022. "Microcredit as A Strategy for Employment Creation: A Systematic Review of the Literature," OSF Preprints ux4b6, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:ux4b6
    DOI: 10.31219/osf.io/ux4b6
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    References listed on IDEAS

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    8. Marcella Corsi & Marina De Angelis, 2017. "Gender Discrimination in Microfinance? Some Evidence from Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 53(5), pages 723-740, May.
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    Cited by:

    1. Dang, Hai-Anh H & Deininger, Klaus & Nguyen, Cuong Viet, 2024. "Did Program Support for the Poorest Areas Work? Evidence from Rural Vietnam," IZA Discussion Papers 17445, Institute of Labor Economics (IZA).

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