Date of Award

6-2018

Document Type

Open Access

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Suthathip Yaisawarng

Language

English

Keywords

Growth and Development, Efficiency, DEA meta frontier technology, gender equality, Microfinance Institutions

Abstract

Poverty is still prevalent in developing economies, although the proportion of people living below the international poverty line ($1.90 a day) decreased by 24.6% between 1990 and 2013 according to World Bank. Women are more likely than men to live in poverty due to minimal access to resources. Microfinance institutions (MFIs) lend small funds to women thereby empowering them, encouraging entrepreneurship and creating creditworthiness.

This thesis examines the effect of MFIs on gender inequality via women empowerment by calculating output-oriented Data Envelopment Analysis using the meta frontier technology, and relating the efficiency results to the Gender Inequality Index (GII) obtained from the United Nations Human Development database. The sample is from Mix Market database between 2002-2016, including MFIs in 17 countries across 5 regions. This thesis tests the null hypothesis that efficiency scores of MFIs and GII are not linearly related, against the alternative, efficiency scores and GII are inversely related. Rejecting the null indicates that MFIs play a critical role in empowering women, thus reducing inequality.

This thesis did not find enough evidence to reject the null hypothesis. Though an in-depth analysis of frequent peers on the meta frontier, such as Spandana and Vietnam Bank for Social Policies (VBSP), show that MFIs can potentially reduce poverty levels and empower women. This thesis can be used by policy makers as a reference on how to implement policies. focus on the structure and management of MFI programs like incorporating government funding and equipping women with vocational training skills.

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