Catalyzing Socioeconomic Change: Exploring Microfinance's Impact on Poverty Dynamics in Afghanistan

Abstract

Amidst the challenges of post-conflict reconstruction and poverty reduction, this study delves into the dynamics of microfinance and its potential to catalyze socio-economic change in Afghanistan. With a focus on critical indicators including employment rates, literacy rates, infant mortality rates, and the national poverty headcount ratio, this research examines the nuanced relationship between microfinance and poverty alleviation. Employing a quantitative approach, the study employs regression analyses to unveil the impacts of microfinance engagement indicators on these socio-economic variables. Drawing from a rich collection of secondary data, this research collects four dimensions of microfinance engagement (i.e. number of active borrowers, gross loan portfolio, amount of savings, and number of active savers) and employs them as parameters vis-à-vis the critical indicators. This research conducts a systemic analysis of the empirical evidence and contributes to the understanding of how microfinance interventions can pave the way for a more inclusive and prosperous future for Afghanistan.