The impact of microcredit: Evidence from across the world

Microcredit is designed to support entrepreneurship and alleviate poverty, but recent research from across seven countries has shown that giving poor people access to microcredit does not lead to a substantial increase in household income. There also appear to be no significant benefits in terms of education or female empowerment. However, what microcredit does do is allow low-income households to better cope with risk and to enjoy greater flexibility in how they earn and spend money. In short, microcredit is a useful financial tool but not a powerful anti-poverty strategy.

Microcredit is designed to support entrepreneurship and alleviate poverty, but recent research from across seven countries has shown that giving poor people access to microcredit does not lead to a substantial increase in household income. There also appear to be no significant benefits in termsof education or female empowerment. However, what microcredit does do is allow low-income households to better cope with risk and to enjoy greater flexibility in how they earn and spend money. In short, microcredit is a useful financial tool but not a powerful anti-poverty strategy.