Microfinance and Poverty Alleviation: Measuring the Effectiveness of Village Banking in Haiti, a Regression Analysis

This paper aims to prove that microfinance, delivered through FINCA Haiti village banking, is positively affecting clients. It uses FINCA Haiti's client assessment survey data to present the evidence. The study employs regression analysis, means testing and cross-tabulation analysis to prove its hypothesis. The study finds that:

• Village banking increases social wealth among clients, but does not significantly affect economic wealth of clients;
• Lack of significance may be due to the control group composition of non-rural bias;
• Rural and non-rural clients demonstrate differing expenditure patterns;
• Lack of key indicators is possible.

The study concludes that the results from this paper have important research and programmatic implications for FINCA as well as the microfinance community. Programmatic and operational implications would warrant increased services for rural clients, such as money transfer services and home improvement loan products.