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Microfinance, competition, and growth

Published online by Cambridge University Press:  04 November 2025

Réda Marakbi ,
Asma Boussetta  and
El Moctar Laghlal
Réda Marakbi*
Affiliation:
Univ, Artois, CNRS, IESEG School of Management Univ Lille UMR, Lille Economie Management (LEM), Arras, France
Asma Boussetta
Affiliation:
Laboratoire d’Économie de Poitiers (LéP). Université de Poitiers, Poitiers, France
El Moctar Laghlal
Affiliation:
Unité de Recherche en Macroéconomie, Croissance et Développement (URMCD), Université de Nouakchott, Nouakchott, Mauritania
*
Corresponding author: Reda Marakbi; Email: reda.marakbi@univ-lille.fr
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Abstract

This paper analyzes the relationship between microfinance, competition, and growth in a sample of 119 countries over the period 1999–2018. Our results are fourfold. First, we show that microfinance increases economic growth. Second, we identify investment and consumption as the main channels explaining the positive effect of microfinance on growth. Third, our study highlights that the conventional financial sector and microfinance are substitutes and not complements in emerging and developing countries. Finally, we show that competitive microfinance markets allow increasing the positive effect of microfinance on growth.

Keywords

Microfinanceeconomic growthcompetitionpanel dataG21D4O4C33

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Type
Articles
Information
Macroeconomic Dynamics , Volume 29 , 2025 , e155
Copyright
© The Author(s), 2025. Published by Cambridge University Press

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