The Impact of Microfinance on Economic Growth in Yemen

Microfinance is a financial service that provides loans, savings, and other financial products to low-income individuals and households. It is often seen as a way to promote economic growth by providing access to capital for small businesses and entrepreneurs. This study examines the impact of microfinance on economic growth in Yemen. Data on microfinance loans disbursed and economic growth (measured by GDP) was collected from the World Bank for the period 1990-2022. The data was analyzed using SPSS to determine the relationship between microfinance and economic growth. The results of the study showed a positive and significant relationship between microfinance and economic growth. This suggests that microfinance can play a role in promoting economic growth in Yemen. The study also found that the impact of microfinance on economic growth was stronger in rural areas than in urban areas. This is likely because microfinance can be more effective in providing access to capital for small businesses and entrepreneurs in rural areas, where there are fewer formal financial institutions. The findings of this study suggest that microfinance can be a valuable tool for promoting economic growth in Yemen. The government and other stakeholders should consider supporting microfinance programs to help boost economic growth and reduce poverty.