013 - Nazari, R.

Rahim Nazari:

Microfinance Services in Afghanistan and Their Impacts on Income Generation: The Case of Microfinance in Herat City



Since 2003, after the fall of Taliban regime, the provision of microfinance services expanded rapidly all over the country. A relatively poor population and weak financial system, like in most of the developing countries, can justify this rapid expansion. Few banks, several microfinance institutions and developmental agencies emerged and started to deliver their services to the financially excluded poor population. However, the effectiveness of microfinance on income generation and consequently poverty reduction was one of the raising concerns among politicians, development agencies, financial institutions and also academic researchers. This study examines the impacts of microfinance services on their clients in Afghanistan. Its particular focus is to answer two main research questions. First, how poor a microfinance client is? Second, do microfinance services have significant impacts on the income-generation and assets accumulation of the clients? The studying area of this research is Herat city, where the microfinance outreach is relatively significant. The methodology of research is designed based on the “With & Without Approach” to examine the differences brought about by microfinance services on the actual clients relative to the prospective ones. The KS-test on the studying sample proved that the two groups of clients, with regards to some characteristics are very closely identical. In addition, they belonged to the group vulnerable non-poor population, based on the international poverty line. Also, the regression analysis.

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