Financial inclusion of the poor in Peru: explanatory factors and determinants

Ana Marr ^[1] ; Janina León ^[2] ; Fátima Ponce ^[2]
1. [1] University of Greenwich
  
  University of Greenwich
  
  Reino Unido
2. [2] Pontificia Universidad Católica del Perú
  
  Pontificia Universidad Católica del Perú
  
  Perú
Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 14, Nº. 1, 2014, págs. 101-122
Idioma: inglés
Enlaces
- Texto completo (pdf)

Resumen
- Following current debate about possible trade-off between financial sustainability and social performance of microfinance institutions (MFIs), this paper explores the extent to which these institutions are capable of expanding ‘financial inclusion’ i.e. provision of financial access to those with no prior access to the financial system. By looking at one of the most dynamic microfinance markets in the world, Peru, the study analyses the factors that help explain the degree of financial inclusion by MFIs of previously-excluded clients, usually poor people. The research shows that statistically significant determinants of financial inclusion are related to MFIs’ asset value and maturity. Importantly, it is also found that alliances established by MFIs with nationwide domestic financial institutions contribute to MFIs’ ability to reach a greater number of people, while there is no statistical significance about the specific economic activity in which the micro-credit is used. Consequently, research findings support our policy recommendations of introducing mechanisms to help strengthen MFIs’ assets and their ability to engage in working relations with other actors in the microfinance system.