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The impacts of microcredit on poverty reduction: evidence from Cambodian rural villages

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  • Phim Runsinarith

    (United Nations Development Programme in Cambodia)

Abstract

This paper attempts to assess the poverty impact of microcredit for a panel of 827 households surveyed in 2001, 2004, and 2008 using propensity score matching (psm) and the difference-in-difference (did) method. The result shows that the poverty headcount in the microfinance institution (mfi) sample, which was highest in 2001, dropped faster compared to those in two other samples. This finding suggests that using loans from mfis may have a positive effect on poverty reduction. The result of regression analysis based on the sample with the common support using the did approach confirms the same results reflecting in higher per capita consumption expenditure, higher food expenditure, higher education expenditure, and higher healthcare expenditure over 2001-2004. Over a longer term 2001-2008, however, the effect of using mfi loan is still found to be significant and positive on only per capita consumption and per capita food consumption.

Suggested Citation

  • Phim Runsinarith, 2014. "The impacts of microcredit on poverty reduction: evidence from Cambodian rural villages," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(2), pages 121-150, December.
    • Handle: RePEc:phs:prejrn:v:51:y:2014:i:2:p:121-150
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    File URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/913/813
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    References listed on IDEAS

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    3. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
    4. Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," The World Bank Economic Review, World Bank, vol. 19(2), pages 263-286.
    5. Coleman, Brett E., 1999. "The impact of group lending in Northeast Thailand," Journal of Development Economics, Elsevier, vol. 60(1), pages 105-141, October.
    6. John Weiss & Heather Montgomery, 2005. "Great Expectations: Microfinance and Poverty Reduction in Asia and Latin America," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 391-416.
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    Cited by:

    1. Thath, Rido, 2018. "Microfinance in Cambodia: Development, Challenges, and Prospects," MPRA Paper 89969, University Library of Munich, Germany.

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    More about this item

    Keywords

    microcredit; poverty reduction; propensity score matching; difference-in-difference method;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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