This research project aims at analyzing the impact of microcredit as well as ethical finance instruments, assessing their positive effects, obstacles and limits in its use, both in emerging countries and in developed economies.
Ethical finance has a very ancient history, both in the western and in the eastern world; microcredit, a microfinance tool born from the experience of the Grameen Bank, the Bengali Institution founded by the Nobel Prize Mohammed Yunus, has originated from it, in more recent times. In fact, the practice of granting small loans to economically vulnerable people was generated from that experience, with the aim to help people being fragile due to their poverty and lack of economic guarantees.
Since its origins, microcredit has been configured as an effective tool to fight poverty. Born in the context of developing countries, microcredit has made its way, over time, even in the most economically advanced countries. Despite the difficulties in evaluating the size of the phenomenon and its concrete impact, it is still used today in both contexts to favor a better distribution of wealth, to support the growth of emerging economies and to reduce inequalities, through a more agile access to credit, the growth of human capital and the strengthening of micro-entrepreneurship.
More in detail, the research has the following objectives:
- To carry out an in-depth, comparative desk research, aimed at the recognition of national and international good practices, and to collect updated data on the amount of contributions of ethical finance and microcredit, both in advanced and developing countries;
- To analyze, in a comparative way, the specific impact of such tools in different geographical and sectorial contexts, with a focus on the role of microcredit in promoting the empowerment of women and fragile subjects such as refugees and migrants, in the two macro-contexts of reference.
- To develop an econometric model to assess microcredit effectiveness.
As highlighted in the previous paragraph, in the scientific world there is actually no unanimity on the real impact and effectiveness of microfinance instruments in reducing poverty and promoting economic growth. The socio-economic scenarios of recent years, characterized by the economic crisis and the increase in inequalities also in advanced countries, have given new impetus to microfinance instruments, and, as we have stressed, this phase has translated into specific legislative and financial supports , both at national and international ground.
This makes it necessary to resume theoretical and empirical research aimed at evaluating the aspects of growth and change, not only from an economic point of view, but also from a social one, which are accompanied by microcredit. In particular, we want to highlight the need to broaden the theoretical horizon, starting from the empirical survey. If, for example, it is a scientifically consolidated opinion that microcredit does not reduce poverty, at least in the short and medium term, it is necessary to investigate the reasons for the numerous failures registered in this regard. Again, it is advisable to understand why microfinance achieves better results in some countries than in others, analyzing its social, cultural and economic characteristics.
On all these aspects, the present research intends to reflect, in an innovative way. Similarly, since microfinance hinges on the social networks of a specific territory - and the two elements inevitably influence each other- research in this field has an important theoretical and practical value.
The acquisition of nodes and key paths in social networks and integration with auxiliary channels will lead to the expansion of microfinance industry.
At the same time, the relations established with microcredit will have a role in consolidating or destroying the network of original relations of the territory, a factor that, in the long run, will imperceptibly change existing social relations: this phenomenon should be given great importance.
However, currently research in this area is still in the beginning, the literature on the subject is scarce and there are still many research opportunities.
In conclusion, the innovative elements of this project proposal lie, in conclusion:
1) On the integrated methodological approach;
2) On the in-depth study of issues so far not fathomed by scientific research related to the effects of microcredit: that on the social tissue, and in particular on the inter-causal relationship between social relations and microfinance; again, the contribution of microcredit initiatives in the concrete implementation of the constitutional principle of subsidiarity with regard to national practices (Italian context);
3) On the compared, international evaluation on microcredit projects key success factors on one hand, and on the criticalities and weakness points on the other hand (SWOT analysis); the analysis will be carried out also taking into account European funded inititives and projects.
4) On the extensive collection of updated data about microfinance fundings worldwide; this kind of activity is of high importance taking into account the increasing relevance, both at national and international ground, of the micro-funding actions.
5) On the comparative perspective that takes into account, at the same time, different socio-economic-geographical areas (developed countries and developing ones), multiple sectoral and economic-productive environments (from those of the advanced economies, to those of the emerging and developing economies, often characterized by specific traditional productive techniques, a peculiar division of labor that takes into account the generational and gender variable, and equally specific environmental conditions).
6) On the outline of an econometric model that takes into account variables that are not only quantitative, but also qualitative.