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The purpose of this paper is to analyze the political effects of microcredit. The author provides the theoretical connections between microfinance and political empowerment and tests them in the context of Central Asia and the Caucasus, a region that is significantly lagging in political development and yet has a growing microfinance potential.

The author conducted a total of 100 in-depth interviews with microcredit clients in Kazakhstan and Azerbaijan in June 2010 and January 2011, respectively. The author chose my client samples randomly from two of the largest non-governmental microfinance institutions in these countries.

The findings of the survey reveal that microloans have only led to modest improvements in the socioeconomic status of the clients and had almost no effect on their political empowerment. Disaggregating the data further in terms of gender, type of loan and location of credit does not change the overall trends but reveals that to the extent that any political empowerment took place, group clients (mostly women) in urban settings were more aware and involved in political issues than individual clients in the villages.

Even with a carefully thought-out design, it is not clear how much the responses reflect the true and complicated impact of microfinance on the clients’ lives, a challenge that may be overcome in future research with focus group analysis or an ethnographic analysis of microcredit clients over a long period of time.

Notwithstanding these shortcomings, these observations can help inform microfinance institutions, donor organizations and governments about the true potential of microfinance. A realization of the limits of this unique development tool may prove useful in reorienting the goals of foreign aid and designing a more effective approach to development.

Despite the extensive literature on the economic and social effects of microcredit, very little attention has been given to how economic empowerment generated by microcredit can translate into political empowerment at the individual level. This paper lays out the theoretical reasons for why such a relationship might exist and tests these hypotheses systematically in two countries, taking into account gender, type of loan instrument and location of the loan.

The purpose of the paper is to investigate the legal status of business entities in the Republic of Azerbaijan. The Azeri government intends to establish a suitable environment for local and foreign companies working in the country.

The paper presents a scientific investigation aimed at discovering and interpreting facts related to legal entities in the Azeri context. The goal of the research process is to produce new knowledge, through the exploratory research, which structures and identifies new problems, and the constructive research, which develops solutions to a problem.

The main finding is that constructing the legal entities within the legal frameworks and in compliance with the European standards play a substantial role in overall economic growth and in attracting foreign investments in the local economy as well as in implementing measures for continuing economic reforms, further improving business climate and developing the non‐oil sector in line with the oil sector.

As a result of this research paper some changes may be made in the local legislation in order to develop the company incorporation procedure in the Republic of Azerbaijan in the most effective way and to provide the integration of the local economy into the world economy.

The originality of this paper is that it describes for the first time the legal status of legal entities in the Republic of Azerbaijan, and discusses the advantages and disadvantages of the company incorporation system. The paper addresses the international business community, particularly those involved in all aspects of commercial and corporative law.