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Reducing Vulnerability through Microfinance: Evidence from Indian Self Help Group Program

Author

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  • Bali Swain, Ranjula

    () (Department of Economics)

  • Floro, Maria

    () (Department of Economics, American University)

Abstract

We investigate if participation in Indian Self Help Group microfinance program (SHG) results in reducing vulnerability. Vulnerability estimates are constructed using cross-sectional SHG rural household survey data, collected in 2003. The potential selection bias is eliminated by propensity score matching to estimate the average treatment on treated effect using nearest neighbour matching and local linear regression algorithm. We find that despite a disproportionately high percentage of poor in the SHG members, vulnerability is not significantly different between the SHG and non-SHG members. This result is found to be robust using sensitivity analysis and Rosenbaum bounds method.

Suggested Citation

  • Bali Swain, Ranjula & Floro, Maria, 2010. "Reducing Vulnerability through Microfinance: Evidence from Indian Self Help Group Program," Working Paper Series 2010:23, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:2010_023
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    References listed on IDEAS

    as
    1. Bali Swain, Ranjula & Floro, Maria, 2007. "Effect of Microfinance on Vulnerability, Poverty and Risk in Low Income Households," Working Paper Series 2007:31, Uppsala University, Department of Economics.
    2. Swain, Ranjula Bali & Varghese, Adel, 2009. "Does Self Help Group Participation Lead to Asset Creation?," World Development, Elsevier, vol. 37(10), pages 1674-1682, October.
    3. Günther, Isabel & Harttgen, Kenneth, 2009. "Estimating Households Vulnerability to Idiosyncratic and Covariate Shocks: A Novel Method Applied in Madagascar," World Development, Elsevier, vol. 37(7), pages 1222-1234, July.
    4. Felbruegge, Torsten & von Braun, Joachim, 2002. "Is The World Becoming A More Risky Place? Trends In Disasters And Vulnerability To Them," Discussion Papers 18730, University of Bonn, Center for Development Research (ZEF).
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    Cited by:

    1. Santi Sanglestsawai & Roderick M. Rejesus & Jose M. Yorobe Jr., 2015. "Economic impacts of integrated pest management (IPM) farmer field schools (FFS): evidence from onion farmers in the Philippines," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 149-162, March.
    2. Ranjula Bali Swain, 2012. "Differential impact of microfinance delivery mechanism on vulnerability," Applied Economics Letters, Taylor & Francis Journals, vol. 19(8), pages 721-724, May.
    3. Raghbendra Jha & Woojin Kang & Hari K. Nagarajan & Kailash C. Pradhan, 2012. "Vulnerability and Responses to Risk in Rural India," ASARC Working Papers 2012-05, The Australian National University, Australia South Asia Research Centre.

    More about this item

    Keywords

    Microfinance; Vulnerability; Poverty; Self Help Groups;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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