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Who Benefits From Microfinance? The Impact Evaluation Of Large Scale Programs In Bangladesh

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Author Info
Asadul Islam Author-X-Name-Asadul

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Abstract

This paper evaluates the impact of microfinance on household consumption using a new, large and unique cross-section data set from Bangladesh. The richness of the data and program eligibility criterion allow the use of a number of non-experimental impact evaluation techniques, in particular instrumental variable (IV) estimation and propensity score matching (PSM). Estimates from both IV and PSM strategies have been interpreted as average causal effects that are valid for various groups of participants in microfinance. The overall results indicate that the effects of micro loans are not robust across all groups of poor household borrowers. It appears that the poorest of the poor participants are among those who benefit most. The impact estimates are lower, or sometimes even negative, for those households marginal to the participation decision. The effects of participation are, in general, stronger for male borrowers. These results hold across different specifications and methods, including correction for various sources of selection bias (including possible spill-over effects).

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File URL: http://www.buseco.monash.edu.au/eco/research/papers/2008/2908microfinanceislam.pdf
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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 29/08.

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Length: 43 pages
Date of creation: 02 Oct 2008
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Handle: RePEc:mos:moswps:2008-29

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Related research
Keywords: Microfinance; treatment effect; Matching; Consumption.;

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Find related papers by JEL classification:
C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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