Template-Type: ReDIF-Article 1.0
Author-Name: Joana Silva Afonso
Author-Email: joaf75@gmail.com
Author-Workplace-Name: Associação Nacional de Direito ao Crédito
Author-Name: Isabel G Mota 
Author-Email: imota@fep.up.pt
Author-Workplace-Name: Faculdade de Economia do Porto
Author-Name: Sandra T silva 
Author-Email: sandras@fep.up.pt
Author-Workplace-Name: Faculdade de Economia do Porto
Title: The financial sustainability of Microcredit in Portugal
Abstract: Microcredit and microfinance emerged in the 1970’s in Bangladesh and other developing countries and expanded rapidly worldwide as a business model financially sustainable and able to fight poverty and social exclusion. Empirical evidence confirms microcredit ability to mitigate poverty but its financial sustainability is controversial. Using 2006-2009 Portuguese micro-level data, we estimate the failure rate of Portuguese micro-credit projects as 20,6%/year that, to be financially sustainable, would require a real interest rate by 25%/year. Using a territorial variable on a discrete Cox proportional hazard model with censured data, we estimate that the failure rate of those micro-credit projects located in the worst-case NUTS II Portuguese regions (Alentejo and Centro) and promoted by lower schooling people is significantly higher than best-case.
Classification-JEL: C31, G21, R58
Keywords: Microcredit, Firms failure rate, Poverty, Financial sustainability
Journal: Economics and Management Research Projects: An International Journal
Pages: 53-56
Volume: 1
Issue: 1
Year: 2011
Month: March
File-URL: http://www.fep.up.pt/repec/por/emrpij/files/EMRPIJ.v1.is1.p53.56.pdf
File-Format: Application/pdf
Handle: RePEc:por:emrpij:v:1:y:2011:i:1:p:53-56