University of Khartoum

Private and social Returns of Microfinance of Saving and Social Development Bank in Sudan

Private and social Returns of Microfinance of Saving and Social Development Bank in Sudan

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Title: Private and social Returns of Microfinance of Saving and Social Development Bank in Sudan
Author: Shaboo, Maha Mohammed El Hussein
Abstract: Recently, there is increasing concern about microfinance, because of its relevance for reduction of poverty; which is the first goal of the Millennium Development Goals. Results of this study useful, because it proves to financial institutions, scaled on the financing of the poor through microfinance, the need to review its previous policies and adopt new policies that stimulate the financing of the poor through microfinance and its feasibility, importance, private and social returns especially on long-term. The study examines two hypotheses on private and social returns of microfinance. To discuss the private return on the supply side, the study uses Granger (1969) causality model to examine the causal relationship between two important variables of microfinance bank. The bank's profit which we measure by the proportion of loan size called in Islamic banking system "margin profit" at the time from 2007 to 2009 i.e. thirty six months and the outreach which we measure by the number of clients that take loans from the bank at the same time. To measure these variables, the researcher uses secondary data collected from Saving and Social Development Bank (SSDB) which is the case study of this research. Using Granger (1969)causality model the study rejects the hypothesis of two ways relationship between the variables, but supports the hypothesis that there is one causal relation running from bank's profit to outreach and that means the increase in profit will give microfinance bank the incentive to reach the large number of clients and this is consistent with the theory of the firm in micro-economics, if the firm has not realized profit, it will not have the incentive to increase its product. On the demand side, the study uses primary data to discuss the social return of loans on the clients of SSDB by examining eight indicators and the outcome of the results are mixed with some positive impacts on some social indicators includes income, consumption, and health care and negative impacts on some social indicators includes saving, quality of nutrition, and entertainment and the other two, the quantity of nutrition and the education are not affect on the clients then the social returns are not adequately clear. But this result do not reduce the value of our study because of the small sample and because the microfinance is in infant stage in Sudan and social return like other social issues are most likely to be fully realized with clear outcome or has a clear results in the long-run
URI: http://khartoumspace.uofk.edu/123456789/16780
Date: 2015-10-27


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