The impact of microcredit on poverty reduction in eleven developing countries in south-east Asia

Abstract

This paper examines the impact of microcredit on poverty reduction, controlling for income and its distribution, employment, inflation rate and education, in 11 developing countries in south-east Asia. Static and dynamic panel data models were used in the growth-poverty model initially suggested by Ravallion (1997), with data from 2007 to 2016. The results indicate that microcredit reduces poverty (as measured by the headcount index, poverty gap and squared poverty gap). They also indicate that employment and education can reduce the level of poverty.