Does Microfinance Reduce Rural Poverty? Evidence Based on Household Panel Data from Northern Ethiopia
Evidence on the long-term impacts of microfinance credit is scarce. We use a unique four-round panel dataset on farm households in northern Ethiopia that had access to microfinance, observed on two key poverty indicators: household consumption and housing improvements. Fixed-effects and random trend models are used to reduce potential selection biases due to time-invariant unobserved heterogeneity and individual trends therein. Results show that borrowing indeed causally increased consumption and housing improvements. A flexible specification that takes into account repeated borrowings also suggests that borrowing has cumulative long-term effects on these outcomes, implying that short-term impact estimates may underestimate credit effects. Copyright 2010, Oxford University Press.
Year of publication: |
2010
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Authors: | Berhane, Guush ; Gardebroek, Cornelis |
Published in: |
American Journal of Agricultural Economics. - Agricultural and Applied Economics Association - AAEA. - Vol. 93.2010, 1, p. 43-55
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Publisher: |
Agricultural and Applied Economics Association - AAEA |
Saved in:
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