IMPACT OF MICROFINANCE IN ALLEVIATING POVERTY IN MENA COUNTRIES

Abstract

Microfinance is a powerful development tool that can reach the poor, raise their living standards, create jobs, and contribute to economic growth. Developing the microfinance industry in the MENA Regions will require building local capacity, increasing the efficiency and sustainability of microfinance programs, and engaging the formal financial sector. Microfinance programs provide financial services, such as credit, deposit, and savings services to the entrepreneurial poor that are tailored to their needs. This study investigates the impact of microfinance on the GDP growth and the relationship between them in MENA countries, and raises the awareness of micro finance among people to run their businesses. Ordinary Least Square Regression method is used to exam the relationship between microfinance and its impacts on GDP growth. The liner regression model is used to measure the relationship between GDP growth and the indicators denoted by broad money, CPI, employment, import, export, and manufacturing. The chosen countries in this study consist of Algeria, Bahrain, Egypt, Jordan, Morocco, and Saudi Arabia. The results showed a significant and insignificant relationship between Microfinance and GDP growth in selected countries