Impact of Access to Microcredit on the WellBeing of Households and Poverty Change in Cameroon: 2001-2007

Ngah Otabela Nadege

Working Papers from African Economic Research Consortium

Abstract: Using data from the second and third Cameroonian household surveys, this study analyzes the relationship between access to microcredit, household wellbeing, and poverty change in Cameroon. It uses a combination of two methods of analysis: the instrumental variable method for controlling the potential endogeneity of access to increased microcredit by correcting for selection bias; and a method for breaking down poverty change into intra-growth, intra-redistribution, and inter-sector mobility components based on Shapley's value. The latter is based on comparison of evidence-based and hypothetical/ non-factual distributions. The key findings reveal that access to microcredit: (i) significantly and positively affects the level of well-being of households and financial inclusion, particularly through education; (ii) has an impact on poverty change and that this effect is brought about by the redistribution component and primary sector; (iii) positively and significantly influences the intra-sector redistribution component of poverty change through the intra-sector growth and mobility components.

Date: 2020-08-04
Note: African Economic Research Consortium
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