|J. Morduch - 1998
Microfinace really help the poor?
The microfinance movement has built on innovations in financial
that reduce the costs and risks of lending to poor households.
Replications of the
movement’s flagship, the Grameen Bank of Bangladesh, have now spread
the world. While programs aim to bring social and economic benefits to
few attempts have been made to quantify benefits rigorously. This paper
a new cross-sectional survey of nearly 1800 households, some of which
by the Grameen Bank and two similar programs, and some of which have no
access to programs. Households that are eligible to borrow and have
access to the
programs do not have notably higher consumption levels than control
and, for the most part, their children are no more likely to be in
school. Men also
tend to work harder, and women less. More favorably, relative to
households eligible for programs have substantially (and significantly)
variation in consumption and labor supply across seasons. The most
potential impacts are thus associated with the reduction of
vulnerability, not of
poverty per se. The consumption-smoothing appears to be driven largely
income-smoothing, not by borrowing and lending.
The evaluation holds lessons for studies of other programs in
countries. While it is common to use fixed effects estimators to
unobservable variables correlated with the placement of programs, using
effects estimators can exacerbate biases when, as here, programs target
programs to specific populations within larger communities.
Key words: microfinance, project evaluation, Grameen Bank, Bangladesh