Analysis of microfinance effects on poverty reduction in Kosovo

• Author: Fitore Rrudhani
• Position: PhD Candidate of Economy at 'St. Cyril and Methodius' University, Teaching Assistant at the University of 'Kadri Zeka'
• Pages: 127-134

127

Vol. 4 No.2

September 2018

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Analysis of microf‌i nance e ects on poverty reduction in Kosovo

Fitore Rrudhani

PhD Candidate of Economy at “St. Cyril and Methodius” University

Teaching Assistant at the University of “Kadri Zeka”

Abstract

This paper deals with a f‌i eld of f‌i nancing which was rapidly spread all around Kosovo. The

main factor of development over the decades has been the reduction of poverty that is still a

global challenge. Lack of access to the formal credit sector is considered a barrier for the poor

in order to be able to access the economic opportunities to increase their living standards.

The microf‌i nance f‌i eld focuses on small credit for the poor to provide assistance to them in

order to generate income-generating activities, thereby contributing to the improvement of

the standard of living. According to many published statistics, we have seen that di erent

mechanisms are being created to reduce poverty, while we are focus on reducing poverty

through microf‌i nance programs. Although these institutions operate at very high interest

rates at all times, they have served as the only channel for f‌i nancing a certain part of society.

Microf‌i nance has generally grown steadily. Our focus is on assessing whether microf‌i nance

institutions have impacted the economy and assessing their impact on poverty reduction in

Kosovo by analyzing all the economic and social aspects, a major issue of Kosovo’s economy.

Keywords: Poverty reduction, microf‌i nance, economy, e ects, impact.

Introduction

From past experience we have seen that social and economic aspects are the ones

that include improving living standards, housing conditions, expanding business

families, changing self-employment opportunities, and adopting new technology. In

many cases the role of microf‌i nance institutions and the assistance that microf‌i nance

o ers to people of the lower layer is questioned, so our research will be related

precisely to this issue which we think is extremely important. The purpose of the

operation of these microf‌i nance institutions may be di erent but the main reason for

the establishment is the provision of services to the strata of society that have limited

access or do not have access to commercial banks at all. A very important source

of job creation is the operation of small and medium-sized enterprises, but these

enterprises face barriers and o en lack access to f‌i nancial products, so microf‌i nance

is taking a special role for the last years. These institutions have provided f‌i nancial

services since the foundation to all those who are interested in microf‌i nance products.

Services oered by microf‌inance are mainly small loans to individuals or low-

income households, such as individual loans, loans to agriculture, small businesses,

rural loans, loans to solidarity and some other types of loans. The development of

microf‌inance institutions in Kosovo has increased signif‌icantly, most low-income

households continue to approach microf‌i nance products with high priority therefore

microf‌inance is an important factor to be considered. Microf‌i nance institutions

have many goals related to the development of the country, such as: stimulating the