The impact of microcredit services on the rural economy: Evidence from Albania
Keywords:microfinance; rural development; improvement; financial conditions
This study's main objective is to explore microfinance services' impact on Albania's rural creditors. Agriculture is turning into an important economic sector for Albania in recent years. This sector is still the basis of income for most of the population and serves as an essential employment source. The study was conducted among a convenience sample of 384 rural microfinance creditors that self-administered and completed survey questionnaires. The study found that microfinance activities significantly contributed to increasing the business economic and financial conditions and improving the living standard and savings. The Albanian government, microfinance institutions, and other international organizations are jointly undertaking a series of programs and projects to create subsidized loans for rural area residents. This demographic group continually faces challenges. Through an empirical analysis, the research paper aims to assess the impact that microcredit has had on rural areas, the challenges these areas face, and some of the elements that may influence the improvement of borrowing conditions in the future.
Balkenhol, B., Guézennec, C. (2013). Professional microcredit in France: what effects on employment? Work document, 2013-07. Paris: Centre d'Analyse Stratégique.
Banerjee, A., Karlan, D., Zinman, J. (2015). Six Randomized Evaluations of Microcredit: Introduction and Further Steps. American Economic Journal: Applied Economics 7 (1): 1 21.
Beck, T., Demirgüç-Kunt, A., Laeven, L., V. Maksimovic, (2006). The Determinants of Financing Obstacles, Journal of International Money and Finance 25, 932–952.
Crépon, B., Devoto, F., Duflo, E., Parienté, W. (2011). Impact of Microcredit in Rural Areas in Morocco, Evidence from a randomized evaluation. Working Paper, International Growth Centre, London School of Economics
Copestake, J., Bhalotra, S., Johnson, S. (2001.) Assessing the Impact of Microcredit: A Zambian Case Study, The Journal of Development Studies, 37:4, 81-100, DOI: 10.1080/00220380412331322051
De Mel, S., Mckenzie, D., Woodruff, C. (2008). Returns to Capital in Microenterprises: Evidence from a Field Experiment. The Quarterly Journal of Economics, 123, 1329-1372.
Dhakal C. P. (2016), Economic impact of microfinance service on rural farmers. International Journal of Development and Economic Sustainability Vol.4, No.5, pp.1-12, October 2016 Published by European Centre for Research Training and Development UK
Duvendack, M., Palmer-Jones, R., Copestake, J., Hooper, L., Loke, Y., N. Rao, (2011). What is the evidence of the impact of microfinance on the wellbeing of poor people? EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.
EU Rural Review-Journal, (2011). http://enrd.ec.europa.eu/publications-and-media/eu-rural-review_en
Kola, F., Korsita, B. (2010). Microcredit role in the sustainable development and social wellbeing, The first International Scientific Conference of the Social Work program at the University of Mostar, Bosnia, and Herzegovina.
Karlan, D., Goldberg, N. (2011). Microfinance Evaluation Strategies: Notes on Methodology and Findings. In Armendariz, B., Labie, M., (eds.). The Handbook of Microfinance. London. World Scientific, pp.17 58.
Marku, E. (2016). Dissertation: "Impact of Microcredit institution. Case of financing agriculture in Fier and Lushnja region."
Muharremi, O, Madani, F., Pelari, E. (2016) Evaluating the Impact of Microfinance for Women in Albania, Journal of Business Theory and Practice, Vol. 4, No. 2, 233-243 doi:10.22158/jbtp.v4n2p233
Nwankwo, O. (2007) Microcredit finance and poverty reduction: challenges and prospects. Journal of Banking, Finance, and Development, 1(1), 66–70
Robinson, M. (2001). The microfinance Revolution, sustainable finance for the poor. World Bank, Washington Dc.
Salko, D. (2001). Rural financial institutions and financing of farms, Bank of Albania, Economic Bulletin, vol. 4, no. 1, page 11
USAID RAFI Notes (2005), (Rural and Agricultural Finance Initiative) Issue 1, A Fresh Look at Rural and Agricultural Finance January 2005;
World Bank report, Poverty & Equity Brief Albania Europe & Central Asia October 2019, https://databank.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_ALB.pdf
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.