Microcredit Impact on Socio-Economic Development and Women Empowerment in Low-Income Countries: Evidence from Yemen

Samer Ali Al-Shami,Nurulizwa Rashid,Abdullah Al Mamun,Mohammed Al-Shami

doi:10.3390/su13169326

Samer Ali Al-Shami, Nurulizwa Rashid + Show 2 more

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https://doi.org/10.3390/su13169326

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Abstract

Microcredit financing is extensively considered as an effective development method for poverty mitigation and women empowerment. Nevertheless, relevant studies reflected opposing outcomes on microfinance effects consisting of positive, zero, and negative impacts. Thus, this research investigated Al-Amal Bank’s microcredit impacts on women empowerment in Yemen, one of the poorest Middle Eastern nations. A panel dataset and primary and secondary data were gathered through household surveys and propensity score matching to restrict intangible variables’ possible effects. The empirical results revealed that microcredit had a significant positive effect on monthly household incomes and accumulated asset values. Although microcredit facilitated female entrepreneurship and income generation for improved household incomes and expenditure, no influence was found on female household decisions and mobility following the patriarchal system practised in many Arabian nations, including Yemen. Hence, the study finding has theoretically and practically contributed to the body of knowledge in three ways. First, a novel proof of how microcredit interactions affected several Yemeni women empowerment elements was identified. This study also provides new insight into the empowerment theory by explaining how access to microcredit influences numerous features of women’s economic and social empowerment. Lastly, social and family traditions significantly influenced female attributes and lifestyles by reflecting how communal and family rituals affected microcredit impacts on women empowerment and vice versa. Conversely, this study guides Yemeni policymakers and those from other nations on extending financial services for self-development to reduce poverty and drive women empowerment rather than relying on government and international agencies.

Highlights

Poverty eradication has globally garnered humanitarian organisations’ attention on development, prosperity, and public security-oriented roles
This research aimed to investigate microcredit impacts on Yemeni women empowerment with a two year panel dataset under the Al-Amal Bank
The findings highlighted that microcredit had a minimal effect on women empowerment, microcredit remarkably affected financial impacts on household income and asset valuation

Summary

Introduction

Poverty eradication has globally garnered humanitarian organisations’ attention on development, prosperity, and public security-oriented roles. Governments and supporting organisations have collaborated to mitigate poverty. Poverty remains rife as a perpetually limiting social dilemma that requires suitable innovations complementing social nature and attributes despite the attempts taken. Microcredit drew substantial attention from the United Nations (UN) among the poverty reduction models and policies as one of the most efficient poverty eradication methods [1]. Microcredit facilitated poverty mitigation, in underprivileged communities, such as in rural Bangladesh, Africa, Southeast Asia, and Middle Eastern nations. Notwithstanding the economic renown of microcredit development since 1976 [2], underprivileged financing classes denoted credit

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