Brooke Gallagher

Econ 441

10/21/10

The Econometrics of Third World Development:

Microcredit Financing and its affect on GDP- Multiple Linear Regression

I. Introduction

Microcredit financing institutions bring a world of banking and financial services to the

poor in developing countries that would not otherwise be available. MFI’s make credit, savings,

insurance, and fund transfers available for low income citizens with the lofty ideal that this will

help to lower the inequality in income distribution among a country. The following paper

analyzes this question through multiple linear regression and economic theory. For the purpose

of this paper, it is less important how microcredit financing works as opposed to if it works.

With the following economic concepts in mind, it is natural to hypothesize that

microcredit financing does make a difference on the level of income inequality or the GINI

coefficient. The only faulty assumptions of MFI’s I can deliberate on is the query on whether it’s

enough to make a substantial difference in a countries’ GDP, whether or not these institutions

reach out to enough of the population. Individually, MFI’s have been known to work but is there

substantial evidence that they make an impact on an entire society? I would assume that they do

by analyzing economic theory mainly based on the fact that the more businesses there are in

operation, the more people there are employed, and the more competitive the wages. But this

may be an idealistic slippery slope and what may actually be happening is a perpetuation of

poverty. The perpetuation occurs through MFI’s accruing funds for loans to poor individuals that

would possibly be better allocated toward expanding enterprises such that more jobs would be

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 created. This is plausible due to the fact that most microenterprises which were started up

through microloans only create jobs for about three to four people on average and one would

assume that a medium size enterprise would stunt that number by the tens or even hundreds

(Book Review, pg. 1).

II. Economic Theory

Economic theory provides us with evidence that implementing the availability of

financial services (financial deepening) will promote a stale economy to flourish. This is due to

the fact that when people have access to savings accounts composed of interest rates, they are

likely to save more and with less credit constraints people are led to higher productivity rates

through more investments. With access to insurance, your assets are protected and fund transfers

lead to safe fund mobility. All of this leads to business diversity which is imperative for

economic growth. The most important fact is that less credit constraints on low income people

leads to higher productivity, which should lead to less inequality by looking at the profit

maximizing model for wage. Comparing marginal product of labor to wage, you will find that as

people become more productive (due to access to financial services), their Marginal Product

increases, and thus, the wages the wealthy pay to the poor also increase, narrowing the income

gap.

The graph at right¹ demonstrates the

labor market in a perfectly
competitive market where Marginal
Revenue is actually equal to the
Marginal Product of Labor. In perfect
competition, MP L is set to equal
Marginal cost to create the highest
possible profit. As you can see, if MP L
shifts to the right (do to more
productive workers), then the wage
will increase.

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¹This graph is meant to be seen as a template and Pm has no meaning for our current
concern. (found on google.com; web images)
 With analysis of the exogenous growth model, or Solow Model, we can see what affects

long run economic growth based on individual factors. In the short run, the model tells us that

subsidies can affect the steady state level of output and that the rate of growth as the economy

converges to the steady state is determined by the rate of capital accumulation (which is

determined by the savings rate and capital depreciation). Consequently, with access to a savings

account where one was not before, one would predict that savings rates would increase and thus,

capital accumulation. That which follows, in the long run, the model tells us that a country with a

higher savings rate will experience higher growth. The model assumes that there can only be

long term growth based on technological progress and labor force growth or else the growth line

converges to the steady state level where the growth rate is constant times the population growth.

It follows that microcredit financing leads to a higher employment rate due to the mass amount

of micro loans given to entrepreneurs to begin microenterprises. Hence, a larger labor force

should lead to growth in the long run. A higher loan rate leads to more innovation which in turn

will lead to technological advances. The following describes a situation where savings rate is

increased and economic growth is not experienced:

Hypothetically, the savings rate, sy is increased

to s1 y when there is an increased abundance of
available financial services. This makes savings
per worker greater than population growth plus
depreciation, ( n+ d ) k , thereby increasing capital
accumulation shifting the steady state from point
A to point B. This also increases output per
worker, y 0to y 1expanding the economy.
However, the model tells us that although the
economy will initially expand, it will return back
to its steady state of growth where output per
worker is constant growing at a rate of n, the
population growth. The economic growth rate
will be the same, according to the model but
there will be a permanent higher amount of
capital and productivity per worker.
Found via google.com web images.
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 This preceding argument in the model might suggest that microfinance is not the best

solution to development issues when in actuality, it might merely be implicit in nature that GDP

is just not the best measure of its success (or failure) due to the conclusions drawn from the

model. However, the model does not take into account entrepreneurship which is a very large

economic force and what microloans are based on; therefore, I think it would still be not only

interesting but important to run this regression.

Many MFI’s focus in on women and some will only strictly lend to women, mainly

because women have a much greater pay back rate. This allows women to enter the workforce,

educating them, and empowering them. The empowerment of women leads to increased decision

making at the community and household level which leads to more equality in things like

education. A more educated population leads to a more advanced and economically stable

society through higher wages. Men tend to invest more in physical capital whereas women tend

to invest more in human capital like education for their children. One study found that household

consumption increased by .40 percent per capita when women received the loan and men’s

consumption increased by only .23 percent (Using Microcredit, pg 3). When consumption is

increased, so is GDP because consumption is a function of GDP (GDP= C + I + G + net Exports,

where C is consumption, I is Investment, and G is Government Spending).

In poor communities, having assets may be a much better savings method than actually

saving in a bank. This is where microcredit loans come in. The reasons for this are varied.

Beginning with the simple fact that most banks in cities are a far bus ride away from the more

rural areas, tax rates are especially high (some as much as 75%), poor people tend to lend from

family and friends and therefore if you have saved money, it is likely you will be asked to give it

away. On average, one is able to save about $.25 to the $1 in poor communities (Why

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Microcredit Works, pg1). Thus, it is much safer for a member of the above mentioned

community to invest their money which is why microfinance can be extremely valuable to a

person drowning in poverty.

Furthermore, microcredit financing is not a charity. It is not a onetime hand out with an

exorbitant group interest rate meant to make a profit off of either. MFI’s continue to lead

instruction to borrowers and customers on successful business operations to ensure sustainability.

This is indeed a form of education and when a subset of a population is educated, so is the

greater population (due to being affected by those around them) and when a population is better

educated, they can advance as a society. I would say that education is the root of a strong

economy. When people are better educated, they can not only earn better wages, but they can

start making better choices regarding finance and the political economy leading to prosperity and

growth.

Other aspects of an economy that impact GDP are wide and varied. To narrow the list

down, I have come up with the most important variables which may affect a country’s GDP level

based off of theory. The first is a question of what type of political state the country is in. It’s

pretty much given that a state of political unrest can be entirely detrimental to a country and its

consumption or savings rate. If a citizen doesn’t trust their government, they are less likely to

save their money in a financial institution (including an MFI) and it has been seen that

consumption decreases. However, if the country is in a state of war, the economy is likely to be

booming because the government creates jobs and pours money into military and defense. More

government spending equates to a higher level of GDP by simply looking at the following

equation: GDP = C + I + G + net exports. Therefore, it highly depends on what form of unrest

the country is going through to see how it will affect GDP.

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 Private property rights are another very important aspect to an economy. With these

rights people are more likely to invest in things such as land. Property rights also create a sense

of independence and dignity. People are more likely to work hard to earn these types of rights

which will lead to things such as innovation. Private property rights include the right to

determine its use and rights to exchange or sell the item with a mutual agreement. “The

fundamental purpose of property rights, and their fundamental accomplishment, is that they

eliminate destructive competition for control of economic resources. Well-defined and well-

protected property rights replace competition by violence with competition by peaceful means

(“Property Rights,” Albert Alchian).”

The government’s role in education can also greatly impact a country. A country whose

government funds and enforces that all children attend school until the age of eighteen versus a

country who only supports education up to age five will possess very different outcomes:

economically, socially, and politically. One would assume through theory that the economic rate

of return on education is very high for multiple reasons. The first reason the rate of return on

education for an entire society is high is that it makes the workforce more competitive and thus

increases wages. The second reason is that it leads to more technological innovation which will

lead to greater efficiency and subsequently, greater economic output. Third, a higher educated

population will be healthier through knowledge of good nutrition and greater access to health

care which means they will live longer lives which consequently means that the society will be

more productive with higher incomes over a greater amount of time. Lastly, it has been shown

that education and crime are negatively correlated which means that less people imprisoned

results in less money spent on police force and imprisonment, thus a gain to the social welfare.

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 Another variable which may significantly impact GDP is the level of corruption in the

country. A country with high rates of corruption by government officials is less likely to have

trusting citizens. Less trust in one’s government has been shown to have an adverse effect on

savings, investment rates (which, as we can see by the equation of GDP, as stated previously),

and tax collection. Corruption means a country is experiencing things like: blackmail from the

police force, extortion, and tax evasion (which may be a circular affect and actually be caused by

a government’s corrupt ways).

III. Data Collection

I chose to analyze an equal number of six countries from six different regions including:

Africa, E. Asia and the Pacific, E. Europe and Central Asia, Latin America and the Caribbean,

the Middle East and N. Africa, and South Asia. I retrieved my data through the internet. The

quantity of microfinance loans was found on mixmarket.org and the GDP levels from the

worldbank.org. As for finding how many years MFI’s have been implemented in a particular

country, the sources are varied but primarily were found through a google.com search.

My first independent variable of concern to help explain y, GDP, is x 1. It will be the

measure of prevalence of microfinance institutions in a country over a given amount of time by

quantifying each countries gross loan portfolio. This is the best measure of microfinance because

it tells us how active the microfinance branches are in banking. If I were to just look at the

number of microfinance branches per country, my results would be off due to the fact that some

branches are smaller than others. The data that I found was all of the reported gross product

loans.

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 A second independent variable of interest x 2 , is a categorical dummy variable quantifying

whether or not the country was in political turmoil or war torn for the duration of time that

microcredit financing was available. I gave each state of being a number: 0 meaning the country

was in a state of peace, 1 meaning there was some political unrest and insecurity, 2 meaning the

country was in a state of cross-country war, and 3 meaning the country was involved in a civil

war. I think this variable is extremely important to look at because whether a country is in war or

the type of unrest they are experiencing can greatly impact a society based off of economic

theory. This data was found on mapreport.com.

Third, the variable x 3is another dummy variable to describe if the country has individual

property laws or not. Property laws are the rights to hold land as your own personal asset and not

to be taken away by anybody including the government. Since I couldn’t find data on property

rights exclusively, I decided to look at the scores on gfmag.com regarding economic freedom

which encompasses property rights. A 0 would mean the government holds all rights to the

property or land that would otherwise be rightfully one’s own and a 100 means there is complete

economic freedom. Included in economic freedom is: property rights, regulatory efficiency, ten

levels of economic openness, and competitiveness. Afghanistan is omitted because there was not

enough reliable information to build data from. I would imagine that a 0 would have an adverse

affect on GDP and reduce it significantly.

A forth independent variable of interest, x 4 , is education. With this I decided to count the

average level of education in each country. I feel that this should have a substantial affect on

GDP due to economic theory as stated above. I feel that the intercept in the regression will be

fairly large to signal a large return on educational investment. However, because educational

policies change frequently in some countries (especially those in political unrest), we may not

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get an accurate picture just by looking at their average education and literacy rate today because

education has a somewhat lag effect. Meaning, although a strict education system may have been

implemented a year ago, a country will not reap the rewards for, say, fifteen years or so. With

this, I feel like it will be a benefit to look at the variables: “education” and “political state” as an

interaction term to see how they interact together since we know there is some correlation

between the two. I found data for the average years of schooling for adults over fifteen on

nationmaster.com under “Duration of compulsory education,” meaning the number of years a

child must legally attend school.

Corruption is the fifth independent variable, x 5, being another categorical dummy variable

based on the level of corruption. Zero being no corruption, or very little, all the way up to nine,

being the most corrupt. I feel it is very important to examine this variable because economic

theory suggests that corruption has an adverse affect on GDP. This is also an interaction term

with x 1, the level of political turmoil. This data was found on:

http://www.nationmaster.com/graph/gov_cor-government-corruption.

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Graphs and summary stats:

Gross Loan Portfolio (millions) vs

GDP Growth
5000
Gross Loan Portfolio
4000 (millions)
3000 Linear (Gross Loan
Portfolio (millions))
2000

1000

0
0.00 5.00 10.00 15.00

Politics vs GDP Growth

3.5
3
2.5
2 Politics
Linear (Politics)
1.5
1
0.5
0
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

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 Property Rights vs GDP Growth
80
70
60
Prop
50
Linear (Prop)
40
30
20
10
0

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12 Educ. vs GDP Growth
10
8
Educ
6 Linear (Educ)
4
2
0
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Corruption vs GDP Growth

9
8
7
6
5 Corrupt
4 Linear (Corrupt)
3
2
1
0
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Corrupt Educ Prop

Mean 7.371429 Mean 7.771429 Mean 55.17143

Standard Error 0.1483Standard Error 0.393403 Standard Error 1.060423
Median 8Median 8 Median 55.4
Mode 8Mode 8 Mode 61
Standard Standard Standard
Deviation 0.877353 Deviation 2.327403 Deviation 6.273547
Sample Sample
Variance 0.769748 Variance 5.416807 Sample Variance 39.35739

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 Kurtosis 5.18587 Kurtosis 2.16011 Kurtosis 0.162973
Skewness -1.93796 Skewness -0.95335 Skewness -0.01689
Range 4 Range 11 Range 29.2
Minimum 4 Minimum 0 Minimum 40
Maximum 8 Maximum 11 Maximum 69.2
Sum 258 Sum 272 Sum 1931
Count 35 Count 35 Count 35

Gross Loan Portfolio

Politics (millions) Change in GDP

1.45714 876.331 2.71500

Mean 3 Mean 4 Mean 3
0.19378 222.207 0.41871
Standard Error 1 Standard Error 1 Standard Error 4
1.68520
Median 1 Median 269.8 Median 9

Mode 1 Mode #N/A Mode #N/A

Standard 1.14642 Standard 1314.59 Standard 2.47714
Deviation 3 Deviation 5 Deviation 8
Sample 1.31428 Sample 172816 Sample 6.13626
Variance 6 Variance 1 Variance 1
- 2.65098
Kurtosis 1.40246 Kurtosis 6 Kurtosis 8.37508
1.94510 2.60089
Skewness 0.11124 Skewness 5 Skewness 9
12.7563
Range 3 Range 4596.4 Range 8
0.22240
Minimum 0 Minimum 3.6 Minimum 4
12.9787
Maximum 3 Maximum 4600 Maximum 9
95.0251
Sum 51 Sum 30671.6 Sum 2

Count 35 Count 35 Count 35

IV. Econometrics

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  Correlation Matrix:

Gross
Loan
Portfolio
  GDP 2 (millions) Politics Prop Educ Corrupt
GDP 2 1
Gross Loan Portfolio (millions) 0.288406 1
Politics -0.2242 -0.05825 1
Prop 0.016902 -0.11566 -0.24718 1
Educ 0.07104 -0.39699 -0.47777 0.436856 1
Corrupt -0.25046 0.02215 0.030913 -0.48642 -0.20206 1
This matrix tells us that the following are positively correlated with a change in GDP: gross loan

portfolio, property rights, and education. Politics is negatively correlated to a change in GDP

meaning the more corrupt a government was, the less positive change in GDP they saw. The

following are negatively correlated with Microfinance Gross Loan Portfolio: politics and

property rights. Politics and property rights have a weak negative correlation and education and

politics has a fairly strong negative correlation. Education and property rights have a positive

correlation, but corruption and property rights have a negative correlation. All these correlations

coincide with economic theory.

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.46841
R Square 0.219408
Adjusted R
Square 0.084823
Standard Error 311.7952
Observations 35

ANOVA
Significan
  df SS MS F ce F
792438. 158487. 1.63025
Regression 5 1 6 9 0.183465
281927 97216.2
Residual 29 1 3

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 361170
Total 34 9      

Coefficien Standar Lower Upper Lower Upper

  ts d Error t Stat P-value 95% 95% 95.0% 95.0%
Intercept 1509.246 1.54559 -487.891 -
976.485 0.13304 3506.38 487.89 3506.38
4 8 3 1 3
Gross Loan 0.077729 -0.01795 -
Portfolio 0.04678 1.66146 0.10739 0.17341 0.0179 0.17341
(millions) 3 8 4 1 5 1
56.2823 0.36025 62.7904 - 62.7904
Politics -52.3199 2 -0.9296 4 -167.43 2 167.43 2
Prop -10.8751 -32.6986 -
10.6704 - 0.31654 10.9484 32.698 10.9484
6 1.01918 7 7 6 7
Educ 18.62705 -46.9672 -
32.0718 0.58079 0.56586 84.2212 46.967 84.2212
2 2 7 8 2 8
Corrupt -121.351 -265.308 -
70.3870 - 0.09534 22.6070 265.30 22.6070
6 1.72405 6 9 8 9

 ^y = β^ 0+ β^ 1 x 1 + ^β 2 x 2+ ^β3 x 3+ ^β 4 x 4 :

predicted value of GDP=1509.246+.0777(GLP)−52.3199( pol )−10.8751(¿)+18.62705( educ)−121.351(corru

From this equation, we can see that a one dollar increase in microfinance loans, all else

equal, will decrease GDP by approximately .0777%. This is a fairly insignificant number

which may show that MFL’s don’t have too much effect on GDP. Because I used

categorical variables for “Politics” and “Corruption,” we need to interpret those slope

coefficients differently. The following table summarizes “Politics:”

Intercept Slope
No political unrest ^β 0= 1509.246 ^β 1+ β3 + β 4 + β5
Political unrest ^β 0 + ^β 2=1456.9261 ^β 1+ β3 + β 4 + β5
Cross-border war ^β 0 +2 β^ 2=1404.6242 ^β 1+ β3 + β 4 + β5
Civil war ^β 0 +3 ^β2 =1352.2863 ^β 1+ β3 + β 4 + β5

15 | G a l l a g h e r
 This table makes more sense than just looking at the intercept for β 2 because as a

country becomes more politically unstable (like in the case of war), they see a smaller

increase in their level of GDP.

 Goodness-of-fit: R2=21.94 %

Adjusted R2=8.48 %

The x variables explain 21.94% of y without taking into account the number of degrees

of freedom. A better look at how the variables explain y is the adjusted R2 because it

takes into account the degrees of freedom (or number of variables we are testing).

8.48% of y is explained by all the x’s. This seems like a small number, however taking

into account how much goes into GDP, it’s fairly agreeable with economic theory.

 To see if the regression had overall significance, I preformed an F-test using the critical

value method and received the following results:

H o : β 1=β 2=β 3=β 4 =β5 =0

H A : At least one β 1 , β2 , β3 , β 4 , β5 ≠ 0

P−value=Significance of F=¿.1835

Significance level=.05

Rejection rule : Reject H 0 if p−value<.05

Therefore, we fail to reject Ho and conclude that y is not statistically significant in its
dependence on x.

 For individual significance of each slope coefficient, I preformed a T-test for n-small
thereby using the t-table.
H 0 : β1 =0
H A : β1 ≠ 0
^β 1−0 .0777
T −stat : = =1.6603
S ^β .0468
1

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 Critical Value:t α =2.045
,n−k−1
2

Rejection Rule : Reject H 0 if |t−stat|>Critical Value

Therefore, we fail to reject H 0 and conclude that β 1 is not significantly different than zero at the 5%
level. These results suggest that GDP is not significantly related to Microcredit Finance. Furthermore, by
looking at the regression output we can conclude that no |t−stat| is greater than the critical value.
Therefore, none of the slope coefficients significantly explain y.

 I also ran a regression including three interaction terms to see if that would change my
goodness-of-fit. I specifically wanted to view the interaction among microfinance loans and 3
other variables: corruption, property rights, and politics. Below are the results:

Regression Statistics
0.7070
Multiple R 21
0.4998
R Square 79
0.3459
Adjusted R Square 95
263.57
Standard Error 7
Observations 35

ANOVA
Significa
  df SS MS F nce F
22567 3.248
Regression 8 1805416 7 421 0.010662
69472
Residual 26 1806293 .81
Total 34 3611709      

Coeffici Standard P- Lower Upper Lower Upper

  ents Error t Stat value 95% 95% 95.0% 95.0%
-
0.578 0.567 1632.2 - 1632.28
Intercept -639.67 1105.29 73 749 -2911.63 88 2911.63 8
Gross Loan Portfolio 6.0296 3.392 0.002 9.6830 2.37629 9.68301
(millions) 52 1.777333 527 226 2.376291 13 1 3
-
0.923 0.364 65.955 - 65.9553
Politics -53.764 58.24257 1 441 -173.483 34 173.483 4
5.4420 0.478 0.636 28.810 28.8100
Prop 13 11.36839 697 155 -17.926 07 -17.926 7

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 6.1464 0.215 0.830 64.690 - 64.6902
Educ 14 28.48113 807 823 -52.3974 22 52.3974 2
71.200 0.890 0.381 235.49 235.491
Corrupt 19 79.92647 821 195 -93.091 14 -93.091 4
- - -
0.0480 3.042 0.005 0.0155 -
Prop*GLP 2 0.015783 36 309 -0.08046 7 0.08046 -0.01557
- - -
0.4583 3.597 0.001 0.1964 -
Cor*GLP 6 0.127402 75 322 -0.72024 8 0.72024 -0.19648
- -
0.0319 0.810 0.425 0.0491 -
Pol*GLP 8 0.039453 51 004 -0.11307 2 0.11307 0.04912

Adding the interaction terms significantly affected the entire regression and the
adjusted R2increased a significant amount to 34.6%. It also brought allover significance
to the regression model because α > p−value , (.05>.0107 ¿, which means we reject H o
and conclude that one or more of the independent variables significantly explain y.
Furthermore, by analyzing the t-stat, we find that microfinance, or GLP, along with the
two interaction terms: corruption and politics with GLP significantly explain variation
in y. We conclude that the marginal effect of microfinance (GLP) on GDP is statistically
different for countries with corrupt governments as well as those with strong property
laws.
 Another way to check whether the marginal effect of GLP on GDP differs among
countries with corruption, I checked the confidence interval (-.7202, -.1965) in which
does not contain zero. Thereby, rejecting H 0 and concluding that the marginal effect of
GLP on GDP does differ depending on the amount of corruption (which I already proved
by looking at the t-stat).
 Interpreting the interaction slope coefficient GLP:
∂GDP ^ ^
= β1 + β 6 property + β^ 7 corruption+ β^ 8 political
∂ GLP
¿ 6.0297−.0481 ( ¿ ) −.4584 ( corr )−.0320( pol)
 To estimate the slope coefficient for a given amount of property laws, corruption, and
politics, all I need to do is plug in the numbers into the above equation.
For: prop=55, corr=8, and pol=0
6.0297−.0481 ( 55 ) −.4584 ( 8 )−.0320(0)=-.283

 To see the percentage change on GDP for each one unit increase of an independent

variable, I constructed a log-linear regression by taking the natural log of all the values

of GDP and running the regression again. The equation I received was:

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 ^
log GDP=6.0537+.0003 ( GLP )−.328 ( pol )−.0288 ( ¿ ) +.2353 ( educ )−.3084 (corr )

A one unit increase in microfinance will increase GDP by .0003%, an increase in political

unrest will decrease GDP by .328%, an increase in property rights will also decrease

GDP by .0288%, and increase in education will increase GDP by .2353%, and an increase

in corruption will decrease GDP by .3084%.

The only slope coefficient which doesn’t make much sense is an increase in property

rights, it goes against economic theory.

V. Conclusion

The results show us that there were not any statistically significant agents affecting GDP

between the variables: microfinance, corruption, education, political state, and property

rights. However, once I added in the interaction terms into the regression, I found that

two of those terms and microfinance did significantly impact y. This seems to hold with

economic theory because there are so many different variables affecting GDP such that

these variables also interact in a sometimes large degree with each other; which when

taken into account (by multiplying the two terms as an extra variable), this can have a

magnifying effect on y.

I mainly set out to determine whether microfinance has an effect on GDP. The results

declare that there is a definite positive correlation, however weak, and therefore is not

statistically significant to GDP. Using the log-linear model, I found that a one unit

increase in GLP will increase GDP by .0003%, all else held constant. Furthermore, using

the interaction terms, I found GLP to have a direct relationship with both politics and

corruption signifying that when working together, the two terms significantly affect GDP.

19 | G a l l a g h e r
 Subsequently, I feel that microfinance (GLP) alone does not have a great effect on GDP

but when working with other aspects of an economy, the converse is true.

Works Cited

Alchian, Albert, “Property Rights,” The Concise Encyclopedia of Economics, 2008, Liberty

Fund, Inc., (http://www.econlib.org/library/Enc/PropertyRights.html)

Boudreaux, Karol and Cowen, Tyler, Why Microcredit Works, Wilson Quarterly, January 9,

2008, (portfolio.com)

Harper, Malcom, Book Review “Why Microfinance Doesn’t Work,” Microfinance Focus, June 7,

2010 (http://www.microfinancefocus.com/news)

Khandker, Shahidur, Using Microcredit to Advance Women, The World Bank, November 1998,

(http://www1.worldbank.org/prem/PREMNotes/premnote8.pdf)

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