Microfinance an Approach for Increasing Output in the Agricultural Sector and Poverty Reduction in Rural Areas

اقتصاد پولی مالی

Article 1, Volume 17, Issue 30, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i30.27202

Author

Sadegh Bakhtiari Bakhtiari^*

Abstract

Considering the expansion of global poverty and its resulting concerns, the
objectives of the Millennium Development Goals (MDGs) may not be achieved
unless a solution is found for this widespread phenomenon. Therefore finding a
solution for poverty reduction and improving the welfare of the vulnerable group has
become a universal objective. This paper discusses the poor performance of formal
financial markets and financial institutions in order to help the poor in developing
countries.
The paper argues that microfinance and microcredit are suitable substitutions for
helping the poor. Some international experiences suggest that microfinance can
empower the vulnerable group, lifting them out of poverty and helping them select a
desired path. Applying econometrics and statistical techniques to Iranian data, it has
been seen that microcredit and microfinance can play a key role in economic growth
and added-value in the agricultural sector. This in turn will result in an overall
poverty reduction.

Keywords

Financial Markets and Financial Institutions; Microfinance and Microcredit