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Does Participation in Microfinance Programs Improve Household Incomes: Empirical Evidence From Makueni District, Kenya

Author

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  • Kiiru, Joy M.
  • Mburu, John G.
  • Klaus, Flohberg

Abstract

Although microfinance has elicited different reactions from different stakeholders, there seems to be a general agreement that it is useful in reducing poverty. This study is an attempt to contribute in to the debate on the impact of microfinance on household incomes. We use a pooled data set collected from the south western part of Makueni district in Kenya to study the households’ access to microfinance credit and how the credit affects their incomes. We control for household selection bias as well as endogenity problems in the sample. Cross sectional analysis fails to show any significant positive impact of microfinance on poverty reduction. Only after the inclusion of time dynamics in the study are we able to find a weak positive significance of microfinance on household incomes.

Suggested Citation

  • Kiiru, Joy M. & Mburu, John G. & Klaus, Flohberg, 2008. "Does Participation in Microfinance Programs Improve Household Incomes: Empirical Evidence From Makueni District, Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52154, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae07:52154
    DOI: 10.22004/ag.econ.52154
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    Cited by:

    1. Dobdinga Cletus Fonchamnyo & Tony Anyangwe & Ndichia Nana Chantal & Gildas Dohba Dinga, 2023. "Capital structure and financial sustainability: stakes of microfinance institutions in Bamenda, Cameroon," Future Business Journal, Springer, vol. 9(1), pages 1-10, December.

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