Overview of the Studies on the Impact of Microenterprise Credit

This paper summarizes the key findings from 32 research and evaluation reports on the impacts of microenterprise credit services. It focuses on household economic security, enterprise stability and growth, and individual control over resources.

The paper identifies two main types of beneficiaries. Richer beneficiaries use credit for capital deepening, which increases their expectations of income and risk at the same time. Poorer beneficiaries use credit for capital widening, which involves unchanged risks and income, or even reduction of risks and vulnerability. The paper states that programs:

• Effectively reach large numbers of poor households and women but have a differential effect on groups within the poor;
• Have varying degrees of positive impacts on participants, most notably in terms of increases in household and enterprise income and assets;
• Show mixed effects upon employment, children's schooling, and women's empowerment.

The paper discusses factors other than program interventions which influence impacts. It concludes that it is unusual for credit to trigger a continuous increase in technical sophistication, output, or employment, as long term borrowers are preoccupied with household survival.