2019 Volume 19 Issue 1 Pages 1-18
With the recent remarkable expansion of Micro Credit programs (MC), the literature of the impact evaluation has been rapidly growing which assesse its effectiveness in the poverty alleviation. However, it is difficult to conclude that the exiting literature has reached a consensus on the effectiveness of MC.
The purpose of this paper is to empirically assess whether the MC program has been effective among the poor people, and if it is effective, what kind of pathway has been followed. The paper uses the case of the Self-Help Group (SHG) Program in Madhya Pradesh, India, and it employs a quasi-experimental method by combining propensity score matching and difference-in-difference analysis.
The results confirm that the MC program has significant effects in economic and social dimension. Furthermore, the sub-sample analysis indicates that MC enables the poor households to change their financial behaviors, such as practicing regular saving and opening individual bank accounts.
