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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

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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 ReviewEmerald Publishing

Published: Jul 1, 2020

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

References