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Medium- and Long-Term Participation in Microcredit: An Evaluation Using a New Panel Dataset from Bangladesh

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  • Asadul Islam

Abstract

The objective of this paper is to estimate the impact of medium- and long-term participation in microcredit programs. It utilizes a new, and large, panel dataset collected from treatment and control households from 1997 to 2005. The data enables us to identify continuing participants in the program as well as newcomers and leavers. We employ different estimation strategies including difference-in-difference-in-difference and propensity score matching methods to control for selection bias. The impact estimates indicate that the benefits from microcredit vary more than proportionately with the duration of participation in a program. Larger benefits are realized from longer-term participation, and the benefits continue to accrue beyond departure from the program. The findings indicate the need to observe longer periods of participation to provide a reliable basis for assessing the effectiveness of microcredit lending. Copyright 2011, Oxford University Press.

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  • Asadul Islam, 2011. "Medium- and Long-Term Participation in Microcredit: An Evaluation Using a New Panel Dataset from Bangladesh," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 843-862.
    • Handle: RePEc:oup:ajagec:v:93:y:2011:i:3:p:843-862
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    File URL: http://hdl.handle.net/10.1093/ajae/aar012
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    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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