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Microfinance and Poverty Reduction: Evidence from Djibouti

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  • Mohamed Abdallah Ali

    (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)

  • Mazhar Mughal

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

Abstract

Does access to microfinance improve household welfare? We seek the answer to this question using data on 2,060 borrower and non-borrower households based in six major urban centers of Djibouti. We construct a composite index of multi-dimensional poverty and carry out estimations using a number of econometric techniques. Our results show that neither access to micro-credit nor its ostensibly productive use is significantly associated with poverty regardless of the duration of time since the loan was acquired. This holds both for access to, and the amount of micro-credit obtained. The results raise doubts on the effectiveness of Djibouti's microfinance programme.

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  • Mohamed Abdallah Ali & Mazhar Mughal, 2019. "Microfinance and Poverty Reduction: Evidence from Djibouti," Working Papers hal-02282359, HAL.
    • Handle: RePEc:hal:wpaper:hal-02282359
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-02282359
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    Cited by:

    1. Samer Ali Al-shami & Abdullah Al Mamun & Nurulizwa Rashid & Mohammed Al-shami, 2021. "Microcredit Impact on Socio-Economic Development and Women Empowerment in Low-Income Countries: Evidence from Yemen," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    2. Shiyu Yan & Jiao Wang & Zhineng Hu, 2023. "Assessment of the effects of targeted poverty alleviation policy on differently poverty‐stricken households: A multi‐propensity score weighting model," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1792-1833, August.

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    Keywords

    productive loans; Microfinance; Djibouti; poverty;
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