Analysis of microfinance effects on poverty reduction in Kosovo

AuthorFitore Rrudhani
PositionPhD Candidate of Economy at 'St. Cyril and Methodius' University, Teaching Assistant at the University of 'Kadri Zeka'
Pages127-134
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 micro 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 eld of 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 micro nance 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 micro nance programs. Although these institutions operate at very high interest
rates at all times, they have served as the only channel for nancing a certain part of society.
Micro nance has generally grown steadily. Our focus is on assessing whether micro 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, micro 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 micro nance institutions and the assistance that micro 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 micro 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 nancial products, so micro nance
is taking a special role for the last years. These institutions have provided nancial
services since the foundation to all those who are interested in micro nance products.
Services o ered by micro nance 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
micro nance institutions in Kosovo has increased signi cantly, most low-income
households continue to approach micro nance products with high priority therefore
micro nance is an important factor to be considered. Micro nance institutions
have many goals related to the development of the country, such as: stimulating the

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