Abstract

This paper aims to study the impact of microfinance on economic development. We used data from the MIX Market (Microfinance Information Exchange), collected from “Enda Tamweel” microfinance institution over the period 1995-2017. The VAR estimation shows that microfinance has a negative and significant impact on the ratio of poverty per capita and the GINI index. Granger's causality test confirms that microfinance contributes more effectively to economic development through its social performance. On the other hand, financial performance gives priority to activities that contribute to the sustainable development of the microfinance institution.

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