Microfinance Intervention and Socioeconomic Transformation: An Application of Propensity Score Matching and Difference-in-Difference Technique

This study examines the impact of microfinance intervention on socioeconomic transformation by using two contemporary techniques, namely, Propensity Score Matching and Difference-in-Difference.

The study is based on primary data collected from 150 women microfinance clients and 75 non-microfinance clients in the state of Meghalaya, as well as secondary data from international publications. It highlights the chain effect of socioeconomic transformation through microfinance intervention by identifying differences between periods before and after the intervention. Key findings of the study include:

• Microfinance significantly transforms the economic status of clients;
• Significant correlations exist between health status and savings, access to social amenities and mobility, and capacity building and mobility;
• Income does not impact decisions regarding education;
• Economic variables do not affect mobility and capacity building.

The study recommends implementation of microfinance intervention on a large scale for greater impact on rural population. It concludes that proper strategizing and implementation at all stages can ensure the emergence of microfinance as a critical tool for poverty alleviation and socioeconomic transformation.