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Who Benefits From Microfinance? The Impact Evaluation Of Large Scale Programs In Bangladesh

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  • Asadul Islam Author-X-Name-Asadul

Abstract

This paper evaluates the impact of microfinance on household consumption using a new, large and unique cross-section data set from Bangladesh. The richness of the data and program eligibility criterion allow the use of a number of non-experimental impact evaluation techniques, in particular instrumental variable (IV) estimation and propensity score matching (PSM). Estimates from both IV and PSM strategies have been interpreted as average causal effects that are valid for various groups of participants in microfinance. The overall results indicate that the effects of micro loans are not robust across all groups of poor household borrowers. It appears that the poorest of the poor participants are among those who benefit most. The impact estimates are lower, or sometimes even negative, for those households marginal to the participation decision. The effects of participation are, in general, stronger for male borrowers. These results hold across different specifications and methods, including correction for various sources of selection bias (including possible spill-over effects).

Suggested Citation

  • Asadul Islam Author-X-Name-Asadul, 2008. "Who Benefits From Microfinance? The Impact Evaluation Of Large Scale Programs In Bangladesh," Monash Economics Working Papers 29/08, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2008-29
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2008/2908microfinanceislam.pdf
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    References listed on IDEAS

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    Cited by:

    1. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    2. Asadul Islam & Chongwoo Choe, 2013. "Child Labor And Schooling Responses To Access To Microcredit In Rural Bangladesh," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 46-61, January.

    More about this item

    Keywords

    Microfinance; treatment effect; Matching; Consumption.;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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