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Can Microfinance Reach the Poorest: Evidence from a Community-Managed Microfinance Intervention

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  • Lønborg, Jonas Helth
  • Rasmussen, Ole Dahl

Abstract

Reaching the poorest is an important objective in many development interventions, and microfinance is no exception. We review performance indicators for effectiveness of targeting described in the literature and suggest a new metric in order to account for extent and severity of poverty as well as the income distribution among the poor. When applying this to a panel dataset from a community-managed microfinance intervention in Northern Malawi, we find regressive targeting: Participants are less poor than the general population in the area. In addition, we provide suggestions as to when and why the poor exit the project.

Suggested Citation

  • Lønborg, Jonas Helth & Rasmussen, Ole Dahl, 2014. "Can Microfinance Reach the Poorest: Evidence from a Community-Managed Microfinance Intervention," World Development, Elsevier, vol. 64(C), pages 460-472.
  • Handle: RePEc:eee:wdevel:v:64:y:2014:i:c:p:460-472
    DOI: 10.1016/j.worlddev.2014.06.021
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    Citations

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    Cited by:

    1. Ksoll, Christopher & Lilleør, Helene Bie & Lønborg, Jonas Helth & Rasmussen, Ole Dahl, 2016. "Impact of Village Savings and Loan Associations: Evidence from a cluster randomized trial," Journal of Development Economics, Elsevier, vol. 120(C), pages 70-85.
    2. Pierrick Baraton & Florian LEON, 2018. "Do banks and microfinance institutions compete? Microevidence from Madagascar," CREA Discussion Paper Series 18-04, Center for Research in Economic Analysis, University of Luxembourg.
    3. repec:bla:jecsur:v:32:y:2018:i:5:p:1483-1513 is not listed on IDEAS
    4. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    5. repec:asi:ajosrd:2019:p:133-146 is not listed on IDEAS
    6. repec:taf:jdevst:v:53:y:2017:i:4:p:530-547 is not listed on IDEAS
    7. repec:jes:wpaper:y:2018:v:10:i:1:p:111-128 is not listed on IDEAS
    8. Medina, Gabriel & Almeida, Camila & Novaes, Evandro & Godar, Javier & Pokorny, Benno, 2015. "Development Conditions for Family Farming: Lessons From Brazil," World Development, Elsevier, vol. 74(C), pages 386-396.
    9. repec:eee:quaeco:v:64:y:2017:i:c:p:44-56 is not listed on IDEAS
    10. Hermes, Cornelis & Hudon, M., 2018. "Determinants of the Performance of Microfinance Institutions: A Systematic Review," Research Report 2018008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    11. Kazushi Takahashi & Abu Shonchoy & Seiro Ito & Takashi Kurosaki, 2017. "How Does Contract Design Affect the Uptake of Microcredit among the Ultra-poor? Experimental Evidence from the River Islands of Northern Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 530-547, April.

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