Abstract:

The main objective of this paper is to find out how the living standards and poverty respond to microfinance in Lebanon. In this study, we evaluate the effect of microfinance on the development of living standards: we examine how microfinance manages to allocate credit among the working poor. We evaluate the degree to which microfinance has helped efficiently the poor to enhance their way of life. Microfinance is defined as any activity that involves giving low-income people some financial services like lending, savings, and insurance with the aim of generating social value. Creating social value can take many forms, such as reducing poverty, improving livelihood possibilities by funding micro businesses, providing insurance and savings for risk management, and smoothing consumption. A wide range of activities are included in microfinance, such as the growth of agricultural businesses, individual and group loans, savings and insurance, and insurance. Regardless of the type of activity, the creation of social value is the overarching goal that connects all participants in the provision of microfinance. Microfinance is considered as a useful strategy for poverty alleviation and it is in operation around the world. The purpose of this study was to examine how microfinance affects poverty reduction through raising living standards and fulfilling basic needs. Nevertheless, microfinance is growing in popularity among the impoverished on a daily basis, especially after the banks ceased borrowing due to the current financial crisis. A quantitative methodology was adopted, where a questionnaire was distributed as a Google-form questionnaire, shared as links via social media platforms to random Lebanese citizens. The study sample is 258 participants who used microfinance to borrow money. The data collected was treated via SPSS, analyzed using descriptive analysis, Pearson correlation, and most importantly using multiple linear regressions. The results show that microfinance operations have a considerable impact on raising the family's standard of living, both economically and socially. Amazingly, the relationship between various social and familial aspects that had been ignored became plain and clear. We have concluded from our study and research that microfinance operations have a noticeable and favorable impact on the living standards, empowerment, and fulfillment of basic needs among the people in society.

Keywords:

Microfinance, Living standards, Poverty, Lebanon, Financial services.

How to Cite:

Dr. Racha Mohamad Arab Ghayad, Dr. Rania Salem and Zeinab Assaf. The Mode of Finance and the Creation of Social Value During the Financial Crisis in Lebanon. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a46/