The impact of loan accessibility on household welfare: An empirical analysis in Lesotho

Musa Deme and Paikene Mangani
Additional contact information
Musa Deme: Hiroshima University, Japan
Paikene Mangani: Hiroshima University, Japan

Review of Socio - Economic Perspectives, 2025, vol. 10, issue 1, 1-14

Abstract: This paper examines the effects of credit access on household spending, using data from the 2021 Finaccess household survey in Lesotho. Data from 2,999 households was analyzed, 1,805 of which had access to credit and 1,194 did not. Using propensity score matching (PSM), the average treatment effect was estimated to understand the impact of access to credit on essential household expenditures, including food, transportation, health, clothing, education, income, and rent. Inverse probability weighting regression adjustment (IPWRA) and Mahalanobis distance matching (MDM) were also used to minimize biases and address confounding. The findings reveal that spending in all categories tends to significantly increase for households with access to credit. These findings emphasize that credit access promotes household welfare, thereby highlighting the importance of loan acquisitions and urging stakeholders and policymakers to improve financial literacy.

Keywords: Access to credit; Household expenditures; Propensity Score Matching; Lesotho (search for similar items in EconPapers)
JEL-codes: I31 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://reviewsep.com/index.php/rsep/article/view/226/347 (application/pdf)
https://reviewsep.com/index.php/rsep (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aly:journl:202348

DOI: 10.2478/rsep-2025-0001

Access Statistics for this article

Review of Socio - Economic Perspectives is currently edited by Veysel KAYA

More articles in Review of Socio - Economic Perspectives from Reviewsep
Bibliographic data for series maintained by Veysel KAYA ().