TY - JOUR
T1 - Finance-Growth Nexus and Banking Efficiency
T2 - The Impact of Microfinance Institutions
AU - Abrar, Afsheen
AU - Hasan, Iftekhar
AU - Kabir, Rezaul
PY - 2021/3/1
Y1 - 2021/3/1
N2 - This paper investigates the relative importance of microfinance institutions (MFIs) at both the macro (financial development, economic growth, income inequality, and poverty) and micro levels (efficiency of traditional commercial banks). We observe a significant impact on most of the fronts. MFIs’ participation increases overall savings (total bank deposits) and credit allocation (loans to private sector) in the economy. Their involvement enhances economic welfare by reducing income inequality and poverty. Additionally, their active presence helps to discipline the traditional commercial banks by subjecting them to more competition triggering higher efficiency.
AB - This paper investigates the relative importance of microfinance institutions (MFIs) at both the macro (financial development, economic growth, income inequality, and poverty) and micro levels (efficiency of traditional commercial banks). We observe a significant impact on most of the fronts. MFIs’ participation increases overall savings (total bank deposits) and credit allocation (loans to private sector) in the economy. Their involvement enhances economic welfare by reducing income inequality and poverty. Additionally, their active presence helps to discipline the traditional commercial banks by subjecting them to more competition triggering higher efficiency.
KW - Microfinance institutions
KW - Commercial banks
KW - Financial development
KW - Income inequality
KW - Poverty
KW - Efficiency
KW - Economic growth
UR - http://www.scopus.com/inward/record.url?scp=85098553622&partnerID=8YFLogxK
U2 - 10.1016/j.jeconbus.2020.105975
DO - 10.1016/j.jeconbus.2020.105975
M3 - Article
SN - 0148-6195
VL - 114
JO - Journal of economics and business
JF - Journal of economics and business
M1 - 105975
ER -