Household Allocation of Microfinance Loans in Kyrgyzstan
Within Kyrgyzstan, microfinance provides the largest source of credit for lowincome households. The allocation of these loans between current consumption and investment has a direct bearing on the impact these loans have on rural development. For investigating this allocation, a multivariate Probit...
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Main Authors | , , , |
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Format | Conference Proceeding |
Language | English |
Published |
2015
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Edition | 1008 |
Subjects | |
Online Access | Get full text |
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Summary: | Within Kyrgyzstan, microfinance provides the largest source of credit for lowincome
households. The allocation of these loans between current consumption
and investment has a direct bearing on the impact these loans have on rural
development. For investigating this allocation, a multivariate Probit model is
developed and populated with borrowers’ loan allocations from 2006 to 2010.
Key factors considered are education, gender, equipment ownership, and
geographical region. Results indicate that the Naryn region has the largest
impact on borrowers’ likelihood to allocate loans toward food and the smallest
(negative) impact on the probability of starting a new business. Mobile phone and
livestock ownership were identified as two key factors, which decreases
borrowers’ probability of using loans to purchase food and increases the
probability of agricultural investment or to start a business. |
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DOI: | 10.22004/ag.econ.210949 |