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Financial inclusion of the poor in Peru: Explanatory factors and determinant

Financial inclusion of the poor in Peru: Explanatory factors and determinant

Marr, Ana, Leon, Janina and Ponce, Fatima (2014) Financial inclusion of the poor in Peru: Explanatory factors and determinant. Applied Econometrics and International Development, 14 (1). pp. 101-130. ISSN 1578-4487

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Abstract

Following current debate about possible trade-off between financial sustainability and social performance of microfinance institutions (MFIs), this paper explores the extent to which these institutions are capable of expanding ‘financial inclusion’ i.e. provision of financial access to those with no prior access to the financial system. By looking at one of the most dynamic microfinance markets in the world, Peru, the study analyses the factors that help explain the degree of financial inclusion by MFIs of previously-excluded clients, usually poor people. The research shows that statistically significant determinants of financial inclusion are related to MFIs’ asset value and
maturity. Importantly, it is also found that alliances established by MFIs with nationwide domestic financial institutions contribute to MFIs’ ability to reach a greater number of people, while there is no statistical significance about the specific economic activity in which the micro-credit is used. Consequently, research findings support our policy recommendations of introducing mechanisms to help strengthen MFIs’ assets and their ability to engage in working relations with other actors in the microfinance system.

Item Type: Article
Additional Information: Originally presented at the 17th LACEA-LAMES Annual Conference, 2012.
Uncontrolled Keywords: microfinance, financial inclusion, Peru
Subjects: H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Faculty / Department / Research Group: Faculty of Business > Department of International Business & Economics
Faculty of Engineering & Science > Natural Resources Institute
Faculty of Engineering & Science > Natural Resources Institute > Development Studies Research Group
Faculty of Engineering & Science > Natural Resources Institute > Food & Markets Department
Related URLs:
Last Modified: 07 Apr 2017 20:40
Selected for GREAT 2016: GREAT b
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/11415

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