The Assesment of Microfinance Effects on Household’s Income and Consumption



Microfinance, banking to the poor, is a recent global phenomenon introduced as a way for combating the poverty in the 1970’s. Before that the poor were not allowed access to credit and loans due to the widespread belief that the poor could not repay loans. But microfinance movement with financial innovations reduced the costs and risks of lending to poor households, and presented as tool for reducing poverty. Today various countries use microfinance, also in Iran there are microfinance institutions.
This research tries to survey the impact of microfinance on household income and consumption. So that the household under cover of employment fund of KOMITE-EMDAD in Tehran province has chosen. In this study, ordinary least square method has selected to evaluate the effects of some variables like microfinance and household characteristics on household income and consumption.
The empirical results indicate that the income of households that used the credit of this fund has increased.
JEL Classifications: D63, H81, I32