The impact of microfinance services on economic development

Анотація

Abstract. Introduction. The main purpose of microfinance is to improve the financial situation of the population and increase the economic development of a country or a region. Consumers of microfinance services are citizens with low-income, retirees, students, people who have fallen on hard times, as well as people who plan to start their own business. However, with the development of market relations, the need for financial services arises among farmers, entrepreneurs of small and medium-sized businesses. Purpose. The main purpose of the academic paper is to analyze the dynamics of microfinance services and assess their impact on the entrepreneurial activity of small and medium-sized enterprises and the consequences for the population. Results. Methods of generalization, analysis, comparison, correlation and regression analysis have been used in order to achieve the purpose outlined. The academic paper considers the impact of microfinance services on the performance of small and medium-sized enterprises in the form of net profit. The results have showed that the impact of the cost of microfinance services on the development of financial activities of small and medium-sized businesses have a positive result, and, when using the proposed regression equation, the company will receive positive results in 2021-2025. The conducted correlation analysis of the impact of microfinance services on the level of the average salary of the population of Ukraine has revealed a high level of dependence of citizens on loans obtained. This is confirmed by the high correlation coefficient. Conclusions. The results of the research have showed a positive impact on improving the financial situation of both enterprises and population. It has been proven that for small and medium-sized businesses, the involvement of microfinance services in financial activities has a positive result in the form of an increase in net profit. Microloans are most in demand among the population. However, the question remains debatable whether the main function of microfinance is improving the living standards of the population, forasmuch as microfinance institutions provide services for low-income segments of the population, giving a small amount of loans, while requiring a high interest rate to cover the cost of the service, associated with a loan. The issue of improving the living standards of the population through the use of microfinance services needs further research.

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