EFFECT OF NON BANK FINANCIAL INSTITUTIONS CREDIT ON POVERTY REDUCTION IN KENYA: A CO INTEGRATION ANALYSIS (1980-2013)
Journal Title: European Journal of Business and Social Sciences - Year 2015, Vol 4, Issue 7
Abstract
This study examines the effect of NBFI’s credit on the population of people living below the poverty line. Using annual time series data over the period 1980 to 2013, the study was informed by a credit model based on the vicious cycle of poverty theory. The PhillipsPerron test was conducted to test for stationarity of the variables under study after which the study employed autoregressive distributed lag (ARDL) model to examine the relationship between NBFIs’ credit on Poverty reduction. The study established that NBFIs’ credit has significant negative effect on the number of people living below the poverty line. The paper recommends that NBFIs should channel more credit to the private sector so as to promote investment, increase output in the economy and consequently reduce poverty levels.
Authors and Affiliations
NIXON KIPROTICH RONO| DEPARTMENT OF ECONOMICS, EGERTON UNIVERSITY, 536 NJORO, KENYA. nixonrono_kip@yahoo.com, +254727839785., LAWRENCE KIBET| DEPARTMENT OF ECONOMICS, EGERTON UNIVERSITY, 536 NJORO, KENYA. EGERTON UNIVERSITY, KENYA., SYMON KIPROP| DEPARTMENT OF ECONOMICS, EGERTON UNIVERSITY, 536 NJORO, KENYA. EGERTON UNIVERSITY, KENYA., MOSES MUTHARIME MWITO| DEPARTMENT OF ECONOMICS, EGERTON UNIVERSITY, 536 NJORO, KENYA. EGERTON UNIVERSITY, KENYA.
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