Microfinance and Household Poverty Reduction: New Evidence from India

Abstract

This study is based on the national-level household data in India provided by the EDA research team in India (www.edarural.com) who coordinated and undertook a national level microfinance impact study for the SIDBI Foundation for Micro Credit. We are grateful to Frances Sinha who allowed us to share the data and her unpublished working papers. We have also benefited from comments from Raghav Gaiha, David Hulme, Takahiro Sato, participants in seminars at University of Manchester and four anonymous referees. Support from RIEB, University of Kobe for the first author is greatly appreciated. The views expressed are those of the authors and they bear full responsibility for any deficiencies that remain.

Estimating the effects of formal and informal credit on farm household welfare: A hierarchical competitive welfare model approach

“…It is further corroborated by Khandker and Faruqee (2003), Khandker (2005), Copestake et al (2005), Dadzie and Ghartey (2010) who concluded in their study that credit helps raise incomes and consumption of poor households in particular and welfare in general. Indeed, similar findings have been reported in related empirical studies in Bangladesh (Khandker, 2005;Pitt and Khandker, 1998;Mahjabeen, 2008;Ahmed et al, 2001;Amin and Sheikh, 2011), China (Li et al, 2011), Indonesia (Okten and Osil, 2004), Bolivia (Maldonado and Gonzalez-Vega, 2008), Vietnam (Duong and Izumida, 2002), Guatemala (Wydick, 1999), India (Imai et al, 2010), Ghana (Alhassan and Sagre, 2006), Ethiopia (Sebhatu, 2012), Malawi (Swaminathan et al, 2010;Shimamura and Lastarria-Cornhiel, 2010;Hazarika and Alwang, 2003), and Tunisia (Foltz, 2004). These studies generally concluded that formal credit helps improve the welfare of borrowers as it empowers them in their decision-making processes, asset accumulation, political participation and legal awareness among others.…”

Characteristics of community savings groups in rural Eastern Uganda: opportunities for improving access to maternal health services

“…Efforts to increase access and availability of finance has largely been spearheaded by non-governmental organizations (NGOs) with minimal government involvement [10]. The available evidence indicates that such initiatives have contributed to the growth of informal saving groups [11] that are able to meet the needs of poorer segments of the population by providing them with savings-based rather than credit-based services at affordable interest rates [7]. Saving groups have been described as time-bound accumulating savings and credit associations, which distribute their assets, which are often financial in nature, to their members during a cycle, which runs for a specific period, and then it starts again [7].…”

Microfinance Notes in the Context of Vietnam

“…Additionally, SHGs ensure bridges between the poor and financial providers by offering support about procedures of borrowings, managing borrowings, and taking debits. SHGs are considered as and effective link between women and the role of microfinance services in increasing job opportunities and income for the poor families in India [29,31]. Based on the SHGs' operations, poor women have been able to access microfinance resources, with the aim of developing small businesses that help them gaining some economic independence.…”

“…In Vietnam, there are three kinds of providers of microfinance, including formal organisations, semi-formal organisations, and informal organisations [5][6][25][26][27][28][29][30][31][32][33][34][35][36], as illustrated in figure 1 below. .…”