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Forschungsprojekte - Dr. Kadyrbek Sultakeev

Microfinance interest rate cap and gender aspect of entrepreneurship in Kyrgyzstan

Mirocredit has been thought of as a key factor in development of microenterprise. However, more recently, the issue of microcredit’s impact has received considerable critical attention. For example, some MFIs charge exorbitant rates that drew the attention of Kyrgyz parliamentarians. For this reason in 2013 Kyrgyzstan introduced the law of “Restriction of usurious activities in the Kyrgyz Republic”.

This proposed research aims to empirically investigate microfinance impact on entrepreneurial activities in Kyrgyzstan, and its change after law adoption. Due to the importance of microfinance in facilitating access on financial resources among all regions of Kyrgyzstan and its availability to the low-income borrowers, the research objectives are as follows:

  • assess the microfinance loan impact on the entrepreneurial activities;
  • asses the microfinance loan impact on the women entrepreneurship;
  • investigate the legislative change in interest rate cap influence on entrepreneurial activities.

In order to investigate the given objectives the life in Kyrgyzstan data for 2010, 2011, 2012, 2013 and 2016 years will be used. This survey includes sample of 3000 households and representative at the national level as well as for urban and rural areas of the country.

The probability of household to be an entrepreneur will be estimated with binary choice model, Probit model, which will be conditional on receiving micro credit loan, individual, household and community characteristics.