Open Access
Subscription Access
Open Access
Subscription Access
Microfinance Outreach and its Linkages to Human Development: Evidences from South Asia with Special Reference to India
Subscribe/Renew Journal
The progress of microfinance outreach can be seen as an effective intervention mechanism to enlarge people’s choice, with respect to some basic indicators of human development. The most important choices are considered to be a long and healthy life, to be educated, and to enjoy a decent standard of living. Under the circumstances, attempts have been made in this paper to examine the cross-country variations in outreach of microfinance sector and that of human development in South Asia, and to establish the empirical relationship between them. In addition, the relationship between microfinance outreach and human development across Indian states is of special interest in this paper. Substantial evidence presented in this paper cast doubt on the empirical association between microfinance outreach and human development, especially after the ‘microfinance meltdown’ in 2008 in South-Asian countries as a whole, and the Indian economy in particular. Therefore, microfinance is not a panacea for achieving human development, rather these semi-formal microfinance institutions can only be a means to promote financial inclusion in low financially inclusive regions which are characterised by the limited presence of formal financial institutions.
Keywords
Microfinance Outreach, Human Development, Convergence, South Asia, India
Subscription
Login to verify subscription
User
Font Size
Information
- Arora, R. U. (2012). Financial inclusion and human capital in developing Asia: The Australian connection. Third World Quarterly, 33(1), 177-197.
- Arouri, M., Ben Youssef, A., Durairaj, V., Dahmani, M., & Mungomba, N. (2014), Microfinance: A powerful tool for human development in Africa. In A. Soucat & N. Mthuli (Eds.), One Billion People, One Billion Opportunities (Chapter 26). Tunis: African Development Bank.
- Asian Development Bank. (2012). India social enterprise landscape report. Retrieved from http://adb.org/ sites/default/files/pub/2012/india-social-enterpriselandscape-report.pdf
- Atapattu, A. (2009). The state of microfinance in Sri Lanka. Prepared for Institute of Microfinance as a part of the project on State of Microfinance in SAARC countries. Retrieved from http://www.inm. org.bd/publication/state_of_micro/Sri%20Lanka. pdf
- Barro, R. J., & Sala-i-Martin, X. (1992). Convergence. Journal of Political Economy, 100(2), 223-251.
- Bateman, M., & Chang, H. (2012). Microfinance and the illusion of development: From hubris to nemesis in thirty years. World Economic Review, 1(2012), 13-36.
- Bedson, J. (2009). Microfinance in Asia: Trends, challenges and opportunities. Produced by The Banking with the Poor Network in collaboration with the SEEP Network. Retrieved from http://www. arcfinance.org/pdfs/pubs/MF_Trends_Challenges_ Opportunities.pdf
- Bhatt, E. (1998). Bank of one’s own. Consultative Group to Assist the Poorest Newsletter. Washington, DC: The World Bank.
- Burgess, R., Pande, R., & Wong, G. (2004). Banking for the poor: Evidence from India. Retrieved from econ. lse.ac.uk/staff/rburgess/eea/jeeabankindia.pdf
- CGAP. (2014). South Asia. Retrieved from http://www. cgap.org/countries/south-asia
- Chattopdhyay, S. K. (2011). Financial inclusion in India: A case study of West Bengal. MPRA Working Paper. Retrieved from http://mpra.ub.uni-muenchen. de/34269/1/MPRA_paper_34269.pdf
- Datta, S. K., & Singh, K. (2019). Variation and determinants of financial inclusion and association with human development: A cross country analysis. IIMB Management Review. Retrieved from https:// www.sciencedirect.com/science/article/pii/ S0970389616301574
- De Bella, G. (2011). The impact of the global financial crisis on microfinance and policy implications. IMF Working paper-WP/11/75.
- Demirguc-Kunt, A., & Levine, R. (2008). Finance, financial sector policies and long-run growth. Washington DC: Commission on Growth and Development, World Bank.
- Desai, M. (1991). Human development: Concepts and measurement. European Economic Review, 35, 350-357.
- Dohulilova, L., Janda, K., & Zetek, P. (2009). Sustainability of microfinance institutions in financial crisis. MPRA Working Paper.
- Dunford, C. (2002). Building better lives: Sustainable integration of microfinance and education in child survival, reproductive health and HIV/AIDS prevention for the poorest entrepreneurs. In S. Daley-Harrris (Ed.), Pathways Out of Poverty.West Hartford: Kumarian Press.
- Duvendack, M., Palmer-Jones, R., Copestake, J. G., Hooper, L., Loke, Y., & Rao, N. (2011). What is the evidence of the impact of microfinance on the wellbeing of poor people? London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London. Retrieved from https://www. givedirectly.org/pdf/DFID_microfinance_evidence_ review.pdf
- Fenton, A., Paavola, J., & Tallontire, A. (2017). The role of microfinance in household livelihood adaptation in Satkhira District, Southwest Bangladesh. World Development, 92, 192-202.
- Gaile, G. L., & Foster, J. (1996, June). Review of methodological approaches to the study of the impact of microenterprise credit programmes. Report Submitted to USAID Assessing the Impact of Microenterprise Services (AIMS).
- Goetz, A. M., & Sen Gupta, R. (1996). Who takes the credit? Gender, power, and control over loan use in rural credit programmes in Bangladesh. World Development, 24(1), 45-63.
- Goldberg, N. (2005). Measuring the impact of microfinance: Taking stock of what we know. Grameen Foundation USA Publication Series.
- Habib, M., Hartel, C., & As-Saber, S. (2006). Social protection and the role of microfinance programs: The case of the Philippines. Asian Profile, 34(6), 567-575.
- Habib, M., & Jubb, C. (2015). Poverty alleviation with microfinance: Bangladesh evidence. In A. Heshmati et al. (Eds.), Poverty Reduction Policies and Practices in Developing Asia, Economic Studies in Inequality, Social Exclusion and Well-Being. Retrieved from www.springer.com/cda/content/ document/cda.../9789812874191-c2.pdf?SGWID
- Hulme, D., & Mosley, P. (1996). Finance against poverty (vol. 2). Psychology Press.
- IMF. (2014). Financial access survey. Retrieved from http://data.imf.org/?sk=E5DCAB7E-A5CA-4892- A6EA-598B5463A34C
- Kabeer, N. (2001). Conflicts over credit: Reevaluating the empowerment potential of loans of women in rural Bangladesh. World Development, 29(1), 63-84.
- Kabeer, N. (2005). Is microfinance the ‘magic bullet’ for women’s empowerment: Analysis of findings from South Asia. Economic and Political Weekly, 4709-4718.
- Khandker, S. (2005). Micro-finance and poverty: Evidence using panel data from Bangladesh. World Bank Economic Review, 19, 263-286.
- King, R. G., & Levine, R. (1993). Finance and growth: Schumpeter might be right. Quarterly Journal of Economics, 108(3), 717-738.
- Kuri, P. K., & Laha, A. (2011a). Financial inclusion and human development in India: An inter-state analysis. Indian Journal of Human Development, 5(1), 61-77.
- Kuri, P. K., & Laha, A. (2011b). Determinants of financial inclusion: A study of some selected districts of West Bengal, India. Indian Journal of Finance, 5(8), 29-36.
- Kuriakose, F., & Joseph, J. (2020). Microfinance and human development in Kerala. SSRN Electronic Journal.
- Laha, A. (2015). Impact of microfinance on poverty in the context of global financial crisis: A cross country analysis with special reference to South Asia. In R. Das (Ed.), Globalization, Investment, and GrowthImplications of Confidence and Governance. IGI Global (USA).
- Lapenu, C., & Zeller, M. (2001, June). Distribution, growth and performance of microfinance institutions in Africa, Asia and Latin America. FCND Discussion Paper No. 114, IFPRI. Retrieved from http://ageconsearch.umn.edu/bitstream/15965/1/ dp01114b.pdf
- Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35(2), 688-726.
- Luchters, G., & Menkhoff, L. (1996). Human development as a statistical abstract. World Development, 24(8), 1385-1392.
- Maes, J. P., & Reed, L. R. (2012). State of microfinance summit campaign report, 2012. USA: Microfinance Summit Campaign.
- Mahbub ul Haq Human Development Centre. (2007). Human development in South Asia, 2007: A ten-year review. Oxford University Press.
- MIX and Intellecap. (2009). Asia microfinance analysis and benchmarking report, 2008. Retrieved from https://www.findevgateway.org/sites/default/files/ publications/files/mfg-en-paper-asia-microfinanceanalysis-and-benchmarking-report-2008- mar-2009_0.pdf
- Mosley, P., & Hulme, D. (1998). Microenterprise finance: Is there a conflict between growth and poverty alleviation? World Development, 26, 783-790.
- NABARD. (2008, January). Report of the Committee on Financial Inclusion.
- NABARD. (2012). Status of microfinance in India, 2011-12. Retrieved from https://www.nabard.org/ Publication/SOS%20Report%202013.pdf
- Nair, T. S., & Tankha, A. (2015). Inclusive finance India report 2014. Retrieved from http://www.accessdev. org/downloads/SOS_Report_2014.pdf
- Nathan, H. S. K., Mishra, S., & Reddy, B. S. (2008). An alternative approach to measure HDI. IGIDR Working Paper WP-2008-002. Retrieved from http:// www.igidr.ac.in/pdf/publication/WP-2008-001
- Odell, K. (2010, May). Measuring the impact of microfinance: Taking another look. Grameen Foundation USA Publication Series.
- Pande, R. (2004). Can rural banks reduce poverty? Evidence from the Indian social banking experiment. Retrieved from www.hks.harvard.edu/fs/rpande/ papers/dobanksmatteraer_rr1.pdf
- Planning Commission. (2011). India human development report 2011: Towards social inclusion. New Delhi: Institute of Applied Manpower Research.
- Rahman, A. (2002). Impact of Grameen bank on the nutritional status of the rural poor. In A Rahman, R. Rahman, M. Hossain & S. M. Hossain (Eds.), Early Impact of Grameen. Grameen Trust, Dhaka.
- Rauniyar, G., & Kanbur, R. (2009). Inclusive growth and inclusive development: A review and synthesis of Asian development bank literature. Occasional Paper No. 8. Retrieved from http://www.adb.org/ sites/default/files/evaluation-document/35885/files/ op8-inclusive-growth-development.pdf
- RBI. (2011, January). Report of the sub-committee of the central board of directors of Reserve Bank of India to study issues and concerns in the MFI sector. Retrieved from http://rbidocs.rbi.org.in/rdocs/ PublicationReport/Pdfs/YHMR190111.pdf
- Rhyne, E. (2001). Mainstreaming microfinance: How lending to the poor began, grew, and came of age in Bolivia. West Hartford, Connecticut: Kumarian Press.
- Roy, S. (2012). Regional disparities in growth and human development in India. ISID Working Paper no. 2012/05. Retrieved from http://isidev.nic.in/pdf/ WP1205.pdf
- Sagar, A. D., & Najam, A. (1998). The human development index: A critical review. Ecological Economics, 25, 249-264.
- Sarma, M. (2008, June). Index of financial inclusion. Working Paper no. 215, Indian Council for Research on International Economic Relations. Retrieved from http://www.icrier.org/pdf/Working_Paper_215. pdf
- Sarma, S. K., & Mehta, M. (2013, March). The best model for micro-lending: Self-help group or joint liability group? Working Paper 239, Institute of Rural Management. Retrieved from http://www.academia edu/5344123/The_Best_Model_for_Micro-lending_ Self_Help_Group_or_Joint_Liability_Group
- Sebstad, J., & Chen, G. (1996, June). Overview of studies on the impact of microenterprise credit. Report submitted to USAID assessing the impact of microenterprise services (AIMS).
- Sriram, M. S. (2012, January 31). Social enterprise in microfinance. Business Standard, Retrieved from http://www.businesstoday.in/opinion/columns/ microfinance-industry-changes-m.s.-shriraminterview/story/22024.html
- Suryanarayana, M. H, Agrawal, A., & Prabhu, K. S. (2011). Inequality-adjusted human development index for India’s States, United Nations Development Programme. Retrieved from http://www.in.undp.org/ content/india/en/home/library/poverty/inequality-_ adjustedhumandevelopmentindexforindiasstates. html
- UNDP, (2014). Human development report 2014. Retrieved from hdr.undp.org/sites/default/files/ hdr14-report-en-1.pdf
- Weiss, J., Montgomery, H., & Kurmanalieva, E. (2003, December). Micro finance and poverty reduction in Asia: What is the evidence? MPRA Working Paper, ADB Institute Research Paper Series No 53. Retrieved from https://mpra.ub.uni-muenchen. de/33140/
- World Bank. (2001). A framework for regulating microfinance institutions: The experience in Ghana and the Philippines. Retrieved from http://www1. worldbank.org/finance/assets/images/2755.pdf
- World Bank. (2006). Microfinance in South Asia: Towards financial inclusion for the poor. Retrieved from http:// siteresources.worldbank.org/SOUTHASIAEXT/ Resources/Publications/448813-1184080348719/ fullreport.pdf
- World Bank. (2012). World Development Indicators. Retrieved from http://data.worldbank.org/ data-catalog/world-development-indicators
- Yeoh, Y. (2017). Microfinance: the impact of institutional environment in Latin America and South Asia (Ph.D. thesis submitted to School of Economics Finance and Marketing, College of Business, RMIT University).
- Zeb, N., Jalal, R. N. U. D., Fayyaz, U. E., & Zaheer, M. A. (2021). Micro finance and economic development: The role of microfinance institutions outreach in Pakistan. The Journal of Asian Finance, Economics and Business, 8(5), 117-126.
Abstract Views: 209
PDF Views: 0