Evaluating the Impact of Microfinance on Health Decisions

By Robert Fluegge. Harvard University. 

This paper attempts to understand the impact that improved access to microfinance ser- vices has on health decisions for low-income communities in developing countries. Using data from a randomized trial in 104 slums of Hyderabad, India, regression-based investigation found no evidence that health decisions changed significantly for households in the communities after 15-18 months of improved access to microcredit. Specifically, there were no statistically signif- icant differences between the treatment and control groups in the probability that a household purified their water or had health insurance of any kind. There was a statistically significant increase in the probability that a household uses a latrine in the treatment group, but the effect was quite small. Collectively, it appears that access to microfinance has little impact on health behaviors for members of low-income communities.

Read the full paper here.