Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The impact of microfinance on Indonesian rural households' welfare

The impact of microfinance on Indonesian rural households' welfare This study investigates the welfare impact of microfinance on rural households in Indonesia. Its finding will bridge the gap in the Indonesian microfinance literature.Design/methodology/approachThe research was conducted by collecting primary data and administering a structured questionnaire to rural households in Bantul District, Yogyakarta Province, Indonesia. We employed the logistic model to measure welfare impacts of microcredit borrowers.FindingsThe research finds that purpose of loan, monthly income, monthly expenditure, interest rates, loan amount, education and marital status have significant effects on the probability of increasing borrowers' welfare after accessing microcredit.Practical implicationsThis study will propose some policy recommendations for Indonesian policymakers that may yield better strategies to help improve the impact of their microcredit programmes on the welfare of rural households.Originality/valueThe authors confirm that the article has not been submitted to peer review, nor is in the process of peer reviewing and nor has been accepted for publishing in another journal. The author(s) confirms that the research in their work is original, and that all the data given in the article are real and authentic. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

The impact of microfinance on Indonesian rural households' welfare

Download PDF
16 pages

Loading next page...
 
/lp/emerald-publishing/the-impact-of-microfinance-on-indonesian-rural-households-welfare-6qAa0FRtQX
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0002-1466
DOI
10.1108/afr-11-2018-0098
Publisher site
See Article on Publisher Site

Abstract

This study investigates the welfare impact of microfinance on rural households in Indonesia. Its finding will bridge the gap in the Indonesian microfinance literature.Design/methodology/approachThe research was conducted by collecting primary data and administering a structured questionnaire to rural households in Bantul District, Yogyakarta Province, Indonesia. We employed the logistic model to measure welfare impacts of microcredit borrowers.FindingsThe research finds that purpose of loan, monthly income, monthly expenditure, interest rates, loan amount, education and marital status have significant effects on the probability of increasing borrowers' welfare after accessing microcredit.Practical implicationsThis study will propose some policy recommendations for Indonesian policymakers that may yield better strategies to help improve the impact of their microcredit programmes on the welfare of rural households.Originality/valueThe authors confirm that the article has not been submitted to peer review, nor is in the process of peer reviewing and nor has been accepted for publishing in another journal. The author(s) confirms that the research in their work is original, and that all the data given in the article are real and authentic.

Journal

Agricultural Finance Review – Emerald Publishing

Published: Jul 1, 2020

Keywords: Microfinance; Poverty; Indonesia; Impact; Logistic model; G21; I32; R51; Q14

References

  • Impact assessment of microcredit on the well-being of women in Ghana
    Amoako, C.; Awuah, A.D.
  • An Assessment of Performance and Sustainability of Microfinance Institutions: A Case Study of Village Credit Institutions in Gianyar, Bali, Indonesia
    Arsyad, L.
  • Indonesia country profile
  • Microfinance in Northeast Thailand: who benefits and how much?
    Coleman, B.E.
  • The determinants of the success of microenterprise: a case study of BRI clients in medan city, Indonesia
    Hawariyuni, W.; Ghani, G.M.; Derus, A.M.
  • Microfinance: its impact, outreach, and sustainability
    Hermes, N.; Lensink, R.
  • The unbanked: evidence from Indonesia
    Johnston, D.; Morduch, J.
  • Quantitative approach to impact analysis of microfinance programmes in Bangladesh—what have we learned?
    Khalily, M.A.B.
  • Microfinance and poverty: evidence using panel data from Bangladesh
    Khandker, S.R.
  • Income and employment effects of micro‐credit programmes: village‐level evidence from Bangladesh
    Khandker, S.R.; Samad, H.A.; Khan, Z.H.
  • Impact of microfinance on rural households in the Philippines
    Kondo, T.; Orbeta, A.; Dingcong, C.; Infantado, C.
  • The welfare impact of microcredit on rural households in China
    Li, X.; Gan, C.; Hu, B.
  • Serving the poorest of the poor: the poverty impact of the khushhali bank's microfinance lending in Pakistan
    Montgomery, H.
  • The microfinance promise
    Morduch, J.
  • The impact of group‐based credit programs on poor households in Bangladesh: does the gender of participants matter?
    Pitt, M.M.; Khandker, S.R.
  • Sustainable microfinance in Indonesia: a sociocultural approach
    Prawiranata, I.R.
  • Impact of microfinance of IBBL on the rural poor's livelihood in Bangladesh: an empirical study
    Rahman, M.M.; Ahmad, F.
  • Welfare impacts of microcredit programmes: an empirical investigation in the state‐designated poor counties of Shaanxi, China
    Rahman, M.W.; Luo, J.; Minjuan, Z.
  • The promise and the peril of microfinance institutions in Indonesia
    Rosengard, J.K.; Patten, R.H.; Johnston, D.E.; Koesoemo, W.
  • If the banks are doing so well, why can't I get a loan? regulatory constraints to financial inclusion in Indonesia
    Rosengard, J.K.; Prasetyantoko, A.
  • An economic impact assessment of a microcredit program in Malaysia: the case of Amanah Ikhtiar Malaysia (AIM)
    Saad, M.N.; Duasa, J.
  • Financial inclusion, gender dimension, and economic impact on poor households
    Swamy, V.
  • Microfinance penetration and its influence on credit choice in Indonesia: evidence from a household panel survey
    Tsukada, K.; Higashikata, T.; Takahashi, K.
  • Estimating the impact of microcredit on those who take it up: evidence from a randomized experiment in Morocco
    Crépon, B.; Devoto, F.; Duflo, E.; Parienté, W.
  • Determinants of the smallholder loan repayment performance: evidence from the Nigerian microfinance system
    Olomola, A.
  • The impact of microfinance on poverty reduction: empirical evidence from Malaysian perspective
    Samer, S.; Majid, I.; Rizal, S.; Muhamad, M.; Rashid, N.