The Impact of Microfinance Interventions: A Meta-analysis

Abstract

The evidence base on the impact of microfinance interventions is quite large and is accompanied by a high level of heterogeneity making it difficult to draw a general conclusion on the effects of microfinance. Based on 1, 111 extracted estimates of microfinance's effects from 31 individual studies, we address this challenge using meta-analysis tools to synthesize the evidence on the impact of microfinance on poverty, empowerment, microenterprises, education and health. After controlling for within and between-study dependence and publication selection bias, precision effect and funnel asymmetry test (PET/FAT) results indicate that microfinance generally has a positive effect on indicators like assets, income, women's status, education and consumption/expenditure. On the other hand, after controlling for moderating variables, multivariate meta-regression analysis (MRA) results report a marginal adverse effect of microfinance on poverty measured by assets, income and consumption/expenditure, but a moderate positive effect on microenterprises is observed. MRA results also support the evidence presented by the PET/FAT analysis for microfinance and empowerment after controlling for moderating variables; however, adverse effects are observed for education and health.