Microfinance Market Diagnostics and Beneficiaries Impact: Case of Albania
This case study diagnoses the attitude and perceptions towards microfinance in Albania, mainly of those who are influenced in some way by MFIs. It analyzes how microfinance services in the country have contributed to poverty reduction and to what level these services have affected entrepreneurial activity. The study also looks into how entrepreneurial businesses can benefit by using microfinance. The research is based on both quantitative and qualitative tools. It uses questionnaires, focus group discussions, and semi-structured interviews to understand the situations that people face and how they use and perceive microfinance and how they benefit from the sector. The paper finds that lending practices have a positive effect on entrepreneurial activities in increasing employee salaries, job creation, and increasing profit margin of enterprises. It also states that becoming a microfinance client is associated with greater food security relative to non-participation. The key research questions addressed in the case study include:
- Does microfinance contribute to enterprise growth?
- How does microfinance lead clients to diversify economic activity?
- Does microfinance increase enterprise income?
- Does the use of microfinance over a period of years increase enterprise assets?
- Does microfinance lead to changes in business practices associated with increased profitability?