On the Interplay between Microfinance and Sustainable Development: Evidence from MENA Countries

In this paper, we attempt to examine the relationship between the microfinance and sustainable development for 10 MENA countries over the period 1990-2018. To this end, we use a multi-step approach based on different statistical tests and econometric models (STAR, ESTAR, LSTAR and STECM). The empirical results clearly show positive and significant relationship between the indicators of microfinance and the sustainable development. By offering the opportunity to access to microcredit, microfinance institutions can contribute to reinforce the sustainable development. Therefore, households should be encouraged to create investment opportunities and increase their demand for microcredit. So, the present study contributes to the literature on the microfinance by providing convincing evidence that the microfinance and microcredit have a significant effect on the sustainable development.