Impact of microfinance on household income and consumption in Bangladesh: Empirical evidence from a quasi-experimental survey

Mohammad Monzur Morshed Bhuiya, Rasheda Khanam, Mohammad Mafizur Rahman, Hong Son Nghiem
2016 Journal of Developing Areas  
This paper analyses the impact of microfinance programs on income and consumption of households in Bangladesh. Primary data on 439 households across 20 villages in 4 districts were collected using a quasi-experimental survey approach. The sample was designed so that member households of microfinance programs were compared with non-member households of similar characteristics. In our econometric analysis, economic wellbeing is proxied using measures of household income and consumption. The
more » ... cal results indicate that despite our survey design effort, microfinance members remain poorer than non-members. But participation in microfinance has positive impacts: one percent increase in the duration of microfinance membership is associated with an increase of income and consumption per adult equivalent by 0.19 and 0.16 percent, respectively. Also, an additional month of participation in microfinance is associated with the lower probability of being poor (using $1.25 PPP per person per day) by 7 Percentage points.
doi:10.1353/jda.2016.0111 fatcat:q5ouiswqxvfczl36anjeonxryq