Bazira Bigawa Abel, PhD Student,

School of Management, Huazhong University of Science and Technology, 

Wuhan, Hubei, P.R. China

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The use of financial services is the most concrete way of analyzing financial inclusion on the demand side. The objective of this paper is therefore to investigate the determinants of loan-taking motivation in semi- rural areas in Burundi. It also aims at establishing a link between the socio-economic development of low-income microcredit beneficiaries through the assessment of cause and effect relationships between various individual characteristics and motivation for borrowing. After data analysis with STATA software using logistic regressions (logit) to perform estimations, we came to the conclusion that microfinance institutions contribute to the socioeconomic development of individuals living in semi-rural areas because of the determinants that motivate low-income households to resort to credit in MFIs. The estimates have significantly reached the conclusion that three reasons motivate recourse to borrowing, namely:  (i) acquisition of equipment, (ii) development of income-generating activities like agribusiness and (3) quite unexpectedly financing better education for higher-income level individuals. However, this research makes it clear that Burundian microfinance institutions which are essential elements in the extension of access to formal financial services must still make efforts to be more inclusive by facilitating conditions for both individual as well as collective credits.

Keywords: Finance, Financial inclusion, loan-taking motivation, microfinance      institutions, semi-rural areas, Burundi


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