An Impact Analysis of Microfinance in Bosnia and Herzegovina
William Davidson Institute Working Paper No. 915
35 Pages Posted: 12 Mar 2008
Date Written: December 2007
This paper applies the financing constraint approach to study whether microfinance institutions improved access to credit for microenterprises in Bosnia and Herzegovina. According to this approach, microenterprises with improved assess to credit rely less on internal funds for their investments. Thus, we compare investment sensitivity to internal funds of micorenterprises in municipalities with significant presence of MFIs to that of micorenterprises in municipalities with no (or limited) presence of MFIs using Living Standards Measurement Survey and MFI branch location data. Results indicate that MFIs alleviated microbusinesses' financing constraint. This approach is applicable to evaluating microfinance impact in other countries.
Keywords: microfinance, impact study, Microfinance Institutions, financing constraints, Eastern Europe, Bosnia and Herzegovina
JEL Classification: G21, G11, O16, P20
Suggested Citation: Suggested Citation