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Is microfinance truly useless for poverty reduction and women empowerment? A Bayesian spatial-propensity score matching evaluation in Bolivia

Rolando Gonzales Martínez (), Joel Mendizabal and Patricia Aranda

Working Papers PMMA from PEP-PMMA

Abstract: Banerjee et al. (2015) presented the results of six randomized evaluations that led them to conclude that micro-credit does not have a transformative impact on poverty and that little evidence of substantial effects on women's empowerment exist. We argue that even if no effects of micro-finance exist at the household/individual level, there still may be observable effects at the regional level due to the wider impacts of microfinance. A Bayesian Spatial-Propensity Score Matching estimator is proposed to measure these regional (spatial) treatment effects. The regional effects of microfinance in Bolivia were tested with this estimator, using census and household survey data. The results – conditional on the assumptions of the study– showed that microfinance was useful for poverty reduction and women’s-empowerment at the municipal level in Bolivia, thus suggesting that microfinance can be used to promote socio-economic development at the regional level.

Keywords: Microfinance; spillover effects; Bayesian methods; spatial statistics; matching (search for similar items in EconPapers)
JEL-codes: C11 C31 G21 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-dev and nep-mfd
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