| Summary: | Jordan has witnessed prorrusing blooming economy over the past few decades.
Nevertheless, many issues faced by its economy such as the large increase in poverty,
lack of employment opportunities, low standard of living, weak infrastructure, and
slow progress in various social and economic indicators. The government has
implemented some policies, but unfortunately, most of them failed due to poor
implementation in Jordan. This study explored the relationship between microfinance
and economic development through entrepreneurship and the impact of its
relationship. The study examined the relationship between entrepreneurial variables as
an intermediary between microfinance and economic development. This study
employed quantitative method in data collection process. A self-administered
questionnaire was used to collect data after validating the questionnaires by the pilot
test. The sample size used in this study was 330 employees from the entrepreneurial
sector who were under the microfinance institutions sector in Jordan, and these
institutions were listed and offici all approved by Central Bank of Jordan. A total of
330 questionnaires were distributed to employees, completed questionnaires were
collected and there were 320 questionnaires that were valid for further analysis. The
framework of the study was tested using multiple regression analyses to prove the
hypotheses that were developed for the study using the modelling of the Partial Least
Squares Structural Equation Modelling (PLS-SEM). The results showed that
microfinance has a significant positive effect on economic development in Jordan. In
addition, the result revealed that microfinance and entrepreneurship have significant
positive relationship, entrepreneurship and economic development also revealed a
significant positive relationship between them. Finally, the results indicated that
entrepreneurship have full mediation effect on microfinance and economic
development in Jordan. The results of this study contributed to the theoretical,
methodological and practical possibilities and opened the door for further research.
The study provided empirical insights in supporting the theory that entrepreneurship
should be used in microfinance.
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