Social Impact Assessment of Microfinance Programmes - weman

Y ij = X ij α + C ij β + M ij γ + T ij δ +v ij
Where Y ij is an outcome on which we measure impact for household i in locality j, X ij is
a vector of household characteristics 3 , C ij is a dummy equal to 1 for active borrowers and
their matched neighbours and 0 otherwise, M ij is a membership dummy variable equal to
1 if household i self-selects into the credit programme, and 0 otherwise; and T ij is a
variable to capture the treatment effects on households that self selected themselves into
the programme and are already accessing loans. T is also a dummy variable equal to 1 for
active borrowers and 0 otherwise. The coefficient δ on T ij is the main parameter of
interest and measures the average impact of the programme. A positive and significant δ
would indicate that microfinance is having a beneficial effect on the borrowers.
UPAP was established in 1996 and in our sample we find clients who are even in their
sixth loan cycle. Therefore we do two separate sets of regression on young and old
borrowers. In our sample the mean number of loan cycles is 2.25, therefore we define
young borrowers as those who have borrowed 2 times or less and old borrowers who
have borrowed more than 2 times but less than 7.
A Single Difference equation is also estimated to assess impact between active borrowers
and the pipeline clients. This exercise was done for both young and old borrowers. The
form of the equation is as follows and the variables are defined as stated above.
Y ij = X ij α + T ij δ +v ij
The results from the estimation of δ are given in Table 7.13. Impact results for
empowerment are the most significant. In the DID regressions, UPAP clients perform
significantly better than other respondents. The coefficients for young and old borrowers
are comparable and on the overall index, young borrowers score almost 9 (p=0.00) point
higher than other respondents and old borrowers score 11 (p=0.00) points higher. Old
borrowers also perform better than pipeline clients in single difference estimates for the
overall empowerment index (1.99; p=0.05) and the economic empowerment index (0.83;
p=0.06). The other variable in the regressions was the Member dummy for the overall
empowerment index, economic empowerment and income empowerment. The
significance of the member dummy implies that people who choose to borrow are more
empowered to begin with especially on economic and income empowerment in this case.
Young borrowers have a 15 percent higher per capita income than other respondents
(p=0.057), while old borrowers have a higher educational expenditure and asset score
than pipeline clients. Old borrowers are spending an extra Rs.150 on education (p=0.04)
and also score 0.63 points higher on the asset index (p=0.034). However, old borrowers
are saving less than all other respondents (-212; p=0.099).
3 For UPAP seven household characteristics were included in the regression out of 15 tested through
ANOVA.
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