Get The Effects Of Microfinance Services On The Growth Of Small

Microfinance has significant positive effect on women's economic empowerment by improving women's independent income, increasing asset possession levels, and improved monthly saving amount. Moreover, the study proved that microfinance has a positive impact on women's entrepreneurship development and business exposure.

The future of microfinance seems bright as it will continue to expand beyond the traditional institutions. New actors like distribution networks and mobile operators will assist in offering financial products and services at cheaper costs to underprivileged and isolated population.

It also provides education. Finally, microfinance can encourage entrepreneurial activity and business development in poverty-stricken areas. Some downsides of microfinance include claims that it can take advantage of those in tough economic situations, a situation similar to loan sharks.

It helps low-income households to stabilize their income flows and save for future needs. In good times, microfinance helps families and small businesses to prosper, and at times of crisis it can help them cope and rebuild.

It is found that the foremost factors obstructing the adoption of microfinance are: lack of financial stability, uncontrolled growth, cultural and value impede, systematic frauds, bureaucratic obstacles, state intervention, methodological defects, and shortage of credit rating agencies.

Microfinance provides tools that the poor can use to manage their finances better. Micro-credit specifically can improve customer liquidity, financial resilience, and occupation choices. Access to microfinance services is an essential step in improving financial health and the incomes of the poor.

There are some cons regarding microcredit, including too much pressure to repay loans, a large suicide rate among borrowers, and severe debt levels. A contributing factor to the disadvantages is the high interest rates on some microcredit loans – rates can be 30% or even higher.

Results reveal that Microfinance is significantly and negatively associated with economic growth, while market capitalization positively impacts the growth. Therefore, financial services provided by the stock market may promote economic growth rather than Domestic credit provided by the banking sector.