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Sustainable Institutions or Sustainable Poverty Targeting: The Case of Microfinance

Author

Listed:
  • Khan, Wajid
  • Sun, Shaorong
  • Khan, Ikramullah

Abstract

Microcredit, being the most unique form of antipoverty intervention in terms of its methodology and outreach, has generated considerable amount of disagreements in recent times. While there may be more serious disagreements surrounding microcredit, this article addresses whether or not microcredit has the potential to alleviate poverty, and whether or not the conclusion derived to the first issue is sensitive to interest rate variations. Connecting the already established principles of economics, we show that there is every reason to believe that microcredit has the potential to change the fortunes of the poor communities. However, we also show that this change in fortune can be in any direction, depending on how costly the financial services of the microfinance institutions are felt by the poor.

Suggested Citation

  • Khan, Wajid & Sun, Shaorong & Khan, Ikramullah, 2015. "Sustainable Institutions or Sustainable Poverty Targeting: The Case of Microfinance," MPRA Paper 63587, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63587
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Poverty; Microfinance Institutions; Optimization; Income/Price Policy;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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