Reducing Vulnerability through Microfinance: Assessing the Impact of Self-Help Groups in India
AbstractWe investigate if participation in Indian Self Help Group microfinance program (SHG) results in reducing vulnerability. Using theSHG rural household survey data collected in 2003, we examine the poverty and vulnerability profiles of SHG and non-SHG rural, low-income household members. Our construction of the vulnerability is based on a methodology that allows for the estimation of household vulnerability using cross-sectional survey data. We use propensity score matching to eliminate the potential selection bias that may arise due to unobservable attributes. We empirically examine the current poverty and vulnerability status of households in SHG and non-SHG groups. We match the treated and comparison groups on the basis of their propensity scores to correct for selection bias and then estimate the average treatment on treated effect using nearest neighbour matching and local linear regression algorithm. To check the robustness of the results, we perform sensitivity analysis and estimate Rosenbaum's bounds. Our empirical results show that despite a disproportionately high percentage of poor in the SHG members, vulnerability is not significantly different between the SHG and non-SHG members.
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Bibliographic InfoPaper provided by American University, Department of Economics in its series Working Papers with number 2010-19.
Date of creation: 2010
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Web page: http://www.american.edu/cas/economics/
Microfinance; Vulnerability; Poverty; Self Help Groups;
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
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