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Medium and Long-Term Participation in Microfinance: 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 impacts of medium and long term participation in microfinance programs. It utilises a new, large and unique 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 triple-difference and propensity score matching methods to control for selection bias. The impact estimates indicate that the benefits from microfinance vary more than proportionately with the duration of participation in a program. Larger benefits are realized from longer-term participation, and that 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 microfinance lending.

Suggested Citation

  • Asadul Islam, 2010. "Medium and Long-Term Participation in Microfinance: An Evaluation Using a New Panel Dataset from Bangladesh," Monash Economics Working Papers 02-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2010-02
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/0210mediumislam.pdf
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    References listed on IDEAS

    as
    1. Suresh de Mel & David McKenzie & Christopher Woodruff, 2009. "Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 1-32, July.
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    More about this item

    Keywords

    Microfinance; Bangladesh; triple-difference; matching; medium-term; long-term.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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