THE IMPACT OF M？CROF？NANCE ON POVERTY: EV？DENCE FROM KYRGYZSTAN

Poverty is a major problem that needs to be solved around the world. Poverty causes huge economic and social problems. The microcredit program has been used effectively in alleviating the poverty since the last quarter of the twentieth century. Nowadays, the microfinance market is growing rapidly. Microfinance is becoming more common in the Kyrgyzstan market, complementing the traditional banking segment. However, how much microfinance affected the poverty is a subject for debate. Giving low income households money may lift them out of poverty for a short period of time but when the credit is spent borrowers fall back into poverty. The aim of the study is to analyze the impact of microfinance practices on poverty in Kyrgyzstan. The data were obtained from 521 microfinance clients in all districts and two largest cities. These are: Chuy, Naryn, Talas, Jalal Abad, Osh, Batken districts and Osh and Bishkek cities. Logistic regression is used to determine the variables that affected poverty in Kyrgyzstan. Results suggest that the microcredit program does not have a positive effect in reducing poverty