Microfinance and Inequality

This paper examines the relationship microfinance and inequality by providing a cross-country empirical study of 61 developing countries. Microfinance plays an important role in the financial market in many developing countries. Although microfinance is expected to significantly affect macro variables, we lack enough empirical research on Impact Analysis at the macro level, such as the effect of microfinance on inequality. We expect microfinance to have an equalizing effect, and provide a first detailed cross-country empirical analysis in this regard. We find that microfinance can lower inequality, and poorer countries need to focus more on the equalizing effect of microfinance