Microcredit Impact Assessment: The Brazilian and Chilean Cases

Date
May 2002
The objective of this paper is to evaluate the impact of micro-entrepreneurs income on two Brazilian and Chilean microcredit programs. Drawing on two unique sources of data, control groups are built using the propensity score to match beneficiaries of micro-credit programs with non-beneficiaries with similar characteristics. Using propensity score and matching techniques, the authors compare the average income of individuals that received microcredit to that of control groups, formed by people with similar characteristics. The results for the Brazilian data show a high positive impact of the microcredit programs, especially for those associated with banks. In the Chilean case the evidence is weaker for bank-based programs and NGO based programs appear to have no positive impact at all.