| || || Women -- Fiji -- Economic conditions|
| || || An economic analysis of microfinance credit in Fiji : its impacts on poverty and women empowerment |
Author: Singh, Baljeet
Institution: University of the South Pacific.
Subject: Microfinance -- Fiji, Economic assistance, Domestic -- Fiji, Women -- Fiji -- Economic conditions
Call No.: Pac HG 178 .33 .F5 S56 2014
Copyright:Under 10% of this thesis may be copied without the authors written permission
Abstract: Since the 1970s, microfinance gained popularity as an important policy intervention tool to address poverty and empower the poor, in particular women. In Fiji the concept of microfinance was introduced in the late 1990s, and to date there are ten microfinance institutions (henceforth ‘MFIs’) providing microfinance services in Fiji, most of which are run with the support of government grants. This study investigates the demand for microcredit by microfinance clients and microcredit’s impacts on poverty reduction and women empowerment of microfinance clients. Based on the stratified sampling approach, a sample of 329 clients from three major microfinance institutions in Fiji covering four major provinces is drawn for the analyses. Around half of the sampled clients are savers and microcredit borrowers (henceforth ‘borrowers’) while the other half are mere savers (henceforth ‘savers’) who have intention to borrow in the near future. Same as the fact that women account for about 90 percent of total microfinance members in Fiji, majority of the sampled observations are women. This study compares performances of borrowers against performances of savers using cross section data. Effects of sample selection bias and endogeneity are addressed in the empirical analyses of demand for microcredit and microcredit’s impacts. Main findings are summarized as follows: (1) Likelihood of a microfinance member’s accessing microcredit (henceforth ‘microcredit accessibility’) is negatively associated with household income, while positively associated with other socio-economic factors. Microcredit amount is positively associated with household income and iTaukei ethnicity, while negatively associated with other socio-economic factors. (2) Household income is positively explained by both microcredit accessibility and amount, together with other socioeconomic factors. (3) Microcredit accessibility, in particular accessibility to productive loans, has positive impacts on women empowerment in many aspects. This study provides important evidence that the microcredit scheme helps the microfinance clients in Fiji in terms of poverty reduction and women empowerment. In light of this, together with the reality that the outreach of the microfinance scheme has been limited over the last decade, the government of Fiji should make greater efforts to promote the microfinance scheme as well as greater participation of microfinance clients in credit programme.