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Is microcredit targeted to poor people? Evidences from a Cambodian microfinance institution

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  • Alberto Lanzavecchia

    (University of Padova)

Abstract

This study extends research on the social performance of microfinance institutions. The research methodology is based on Grameen Progress out of Poverty IndexTM (PPITM) for Cambodia applied to a sample of borrowers randomly extracted from a Cambodian microfinance institutionÕs loan portfolio. Dataset has been directly collected through in-house interviews. Main questions discussed here are: (1) Is microcredit targeted to poor people? (2) Has the poverty rate of the sample changed in last six months? and (3) What percentage of male vs. female clients is poor? We found an average poverty likelihood of about 8.1%, estimated at the day of the interview, steady over a period of six months and not statistically different between male and female borrowers. This evidence might be related to business geographical location or targeting. Actually, PPI too much relies on asset ownership rather than on cash flows and saving capacity. Despite the general wisdom microcredit is targeted to the Òpoorest among the poor peopleÓ, this is utterly consistent with a sound and safe (micro)banking activity, aimed at sustainable results. Here comes a call for a triple bottom line performance evaluation on microfinance institutions: economic, social and environmental effects of their activities.

Suggested Citation

  • Alberto Lanzavecchia, 2012. "Is microcredit targeted to poor people? Evidences from a Cambodian microfinance institution," "Marco Fanno" Working Papers 0149, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0149
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    References listed on IDEAS

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    1. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
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    3. International Monetary Fund, 2002. "Microfinance Institutions and Public Policy," IMF Working Papers 2002/159, International Monetary Fund.
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    6. Guush Berhane & Cornelis Gardebroek, 2010. "Does Microfinance Reduce Rural Poverty? Evidence Based on Household Panel Data from Northern Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 43-55.
    7. David Roodman & Jonathan Morduch, 2014. "The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 50(4), pages 583-604, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    microcredit; social performance; poverty index; case study; Cambodia.;
    All these keywords.

    JEL classification:

    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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