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

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  • Asadul Islam Author-X-Name-Asadul

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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Bibliographic Info

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
Date of revision:
Handle: RePEc:mos:moswps:2008-29

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

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Cited by:
  1. Asadul Islam & Chongwoo Choe, 2013. "Child Labor And Schooling Responses To Access To Microcredit In Rural Bangladesh," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 46-61, 01.
  2. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).

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