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Who Benefits the Most from Micro-Credit? Micro-Level Evidence from Sub-Saharan Africa

Author

Listed:
  • James, Emmanuel O.
  • Bakas, Dimitrios
  • Thompson, Piers
  • Ebireri, John

Abstract

This paper moves beyond typical mean effect analysis to examine who truly benefits from micro-credit. Utilising household-level panel data from 2010 to 2019 for a sample of Sub-Saharan African countries, via a quantile panel framework, we show that micro-credit has positive outcomes for households below specific welfare levels in low and lower-middle income countries. Conversely, the impact is less pronounced for wealthier households. Our results highlight inequalities in welfare outcomes, particularly favouring households in low to median quantiles. Notably, the effects of micro-credit vary across countries’ welfare levels, with significant impacts observed in low income countries. Policy recommendations emphasise targeting micro-credit interventions towards low to median welfare households to enhance welfare outcomes.

Suggested Citation

  • James, Emmanuel O. & Bakas, Dimitrios & Thompson, Piers & Ebireri, John, 2025. "Who Benefits the Most from Micro-Credit? Micro-Level Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:wdevel:v:193:y:2025:i:c:s0305750x25001081
    DOI: 10.1016/j.worlddev.2025.107023
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    More about this item

    Keywords

    Welfare; Micro-credit; Quantile regression; Inequality; Endogeneity;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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