Munich Personal RePEc Archive

Financial Constraints and Poverty

Kodila-Tedika, Oasis and Ngunza Maniata, Kevin (2018): Financial Constraints and Poverty.

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Abstract

This article revisits again relationship between financial sector and poverty, by testing the hypothesis according to which it is primarily financial constraints that affect poverty before the size of the financial sector. We find empirically proofs, which suggest that the differential of financial constraints is negatively linked at the level of poverty. This effect is robust in the control of deepening or financial development. Besides, it has an unstable sign. It persists even in the controls of other variables and economic technical changes. In conclusion, the countries with higher financial constraints are those where poverty is rife.

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