Microfinance and the Decision to Invest in Children’s Education
Although one of the primary objectives of microfinance has been the reduction of poverty through the provision of credit for income-generating purposes, evidence of its impact on poverty has been mixed. Even if there is no direct impact of microfinance, there may be an indirect positive impact throu...
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| Format: | Article |
| Language: | English |
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MDPI AG
2018-02-01
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| Series: | International Journal of Financial Studies |
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| Online Access: | http://www.mdpi.com/2227-7072/6/1/16 |
| _version_ | 1819129749656567808 |
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| author | PV Viswanath |
| author_facet | PV Viswanath |
| author_sort | PV Viswanath |
| collection | DOAJ |
| description | Although one of the primary objectives of microfinance has been the reduction of poverty through the provision of credit for income-generating purposes, evidence of its impact on poverty has been mixed. Even if there is no direct impact of microfinance, there may be an indirect positive impact through the effect of microcredit availability on families’ decisions to invest in their children’s education. In this paper, I describe a study undertaken to gauge the impact of microcredit availability on education expenditures for children of clients of a South Indian microfinance institution. I first look at some determinants of the demand for education and then go on to consider what we know about how microcredit affects this demand. I find that microcredit has an impact on the demand for education as mediated by wealth effects and status effects, i.e., microloans increase spending on education the greater the wealth and the greater the social status of the family. Focus group interviews suggest that the impact of microcredit on the demand for education comes mainly from the greater access to financial resources and, to a lesser degree, from an accompanying appreciation of the value of education. |
| first_indexed | 2024-12-22T08:48:40Z |
| format | Article |
| id | doaj.art-d3f5b83f5ad14edbbfc511dcbe0c2c42 |
| institution | Directory Open Access Journal |
| issn | 2227-7072 |
| language | English |
| last_indexed | 2024-12-22T08:48:40Z |
| publishDate | 2018-02-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | International Journal of Financial Studies |
| spelling | doaj.art-d3f5b83f5ad14edbbfc511dcbe0c2c422022-12-21T18:32:02ZengMDPI AGInternational Journal of Financial Studies2227-70722018-02-01611610.3390/ijfs6010016ijfs6010016Microfinance and the Decision to Invest in Children’s EducationPV Viswanath0Lubin School of Business, Pace University, 1 Pace Plaza, New York, NY 10038, USAAlthough one of the primary objectives of microfinance has been the reduction of poverty through the provision of credit for income-generating purposes, evidence of its impact on poverty has been mixed. Even if there is no direct impact of microfinance, there may be an indirect positive impact through the effect of microcredit availability on families’ decisions to invest in their children’s education. In this paper, I describe a study undertaken to gauge the impact of microcredit availability on education expenditures for children of clients of a South Indian microfinance institution. I first look at some determinants of the demand for education and then go on to consider what we know about how microcredit affects this demand. I find that microcredit has an impact on the demand for education as mediated by wealth effects and status effects, i.e., microloans increase spending on education the greater the wealth and the greater the social status of the family. Focus group interviews suggest that the impact of microcredit on the demand for education comes mainly from the greater access to financial resources and, to a lesser degree, from an accompanying appreciation of the value of education.http://www.mdpi.com/2227-7072/6/1/16microfinanceeducationhuman capitalsocial statusIndia |
| spellingShingle | PV Viswanath Microfinance and the Decision to Invest in Children’s Education International Journal of Financial Studies microfinance education human capital social status India |
| title | Microfinance and the Decision to Invest in Children’s Education |
| title_full | Microfinance and the Decision to Invest in Children’s Education |
| title_fullStr | Microfinance and the Decision to Invest in Children’s Education |
| title_full_unstemmed | Microfinance and the Decision to Invest in Children’s Education |
| title_short | Microfinance and the Decision to Invest in Children’s Education |
| title_sort | microfinance and the decision to invest in children s education |
| topic | microfinance education human capital social status India |
| url | http://www.mdpi.com/2227-7072/6/1/16 |
| work_keys_str_mv | AT pvviswanath microfinanceandthedecisiontoinvestinchildrenseducation |