Economic Freedom and the Success of Microfinance Institutions

24 Pages Posted: 30 Aug 2006

See all articles by Pete Crabb

Pete Crabb

Northwest Nazarene University

Date Written: August 28, 2006


This study looks at the relationship between the success of microfinance institutions and the degree of economic freedom in their host countries. Many microfinance institutions are currently not self-sustaining and research suggests that the economic environment in which the institution operates is an important factor in the ability of the institution to reach this goal, furthering its mission of outreach to the poor. The sustainability of the microlending institutions is analyzed here using a large cross-section of institutions and countries. The results show that microfinance institutions operate primarily in countries with a relatively low degree of overall economic freedom and that various economic policy factors are important to sustainability.

Suggested Citation

Crabb, Peter R., Economic Freedom and the Success of Microfinance Institutions (August 28, 2006). Available at SSRN: or

Peter R. Crabb (Contact Author)

Northwest Nazarene University ( email )

623 S University Blvd
Nampa, ID 83686
United States
208 467-8536 (Phone)

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