An Impact Analysis of Microfinance in Bosnia and Herzegovina

William Davidson Institute Working Paper No. 915

35 Pages Posted: 12 Mar 2008

See all articles by Valentina Hartarska

Valentina Hartarska

Auburn University - Department of Agricultural Economics and Rural Sociology; Auburn University - Department of Finance

Denis A. Nadolnyak

Auburn University - Department of Agricultural Economics and Rural Sociology

Date Written: December 2007

Abstract

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

Hartarska, Valentina and Nadolnyak, Denis A., An Impact Analysis of Microfinance in Bosnia and Herzegovina (December 2007). William Davidson Institute Working Paper No. 915. Available at SSRN: https://ssrn.com/abstract=1105052 or http://dx.doi.org/10.2139/ssrn.1105052

Valentina Hartarska (Contact Author)

Auburn University - Department of Agricultural Economics and Rural Sociology ( email )

Comer Hall
Auburn, AL 36849
United States

Auburn University - Department of Finance ( email )

Auburn, AL 36849
United States

Denis A. Nadolnyak

Auburn University - Department of Agricultural Economics and Rural Sociology ( email )

Comer Hall
Auburn, AL 36830
United States

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