Special Evaluation Study. MICROFINANCE DEVELOPMENT STRATEGY 2000 Sector Performance and Client Welfare September 2012

Transcription

1 Special Evaluation Study MICROFINANCE DEVELOPMENT STRATEGY 2000 Sector Performance and Client Welfare September 2012 Independent Evaluation Department, ADB Binh Nguyen 04 September 2014

2 Scope of Evaluation Portfolio Assessment: Portfolio: Assessed 78 microfinance projects of $2.52 billion that ADB provided to 21 DMCs during Evaluation criteria: relevance, responsiveness, and results (3R-framework) Each evaluation criterion was assessed based on a set of 5 indicators Projects were rated individually and the scores were aggregated to country, regional, and ADB overall scores, weighted proportionally to the portfolio size Interviews and surveys of microfinance-related staff in ADB: 15 staff interviewed, 8 replied to survey questionnaire Case Countries: Countries: CAM, PAK, PNG, PHI, UZB, and VIE (33% of ADB microfinance portfolio of ) Field visits: 15 MFIs, rural banks, credit and savings cooperatives Institutional survey: 56 MFIs, rural banks, credit and savings cooperatives Client survey: 608 clients Welfare Impact Evaluations: PAK Microfinance Sector Development Program ( ): $150 million ($80 million microloans for the poor) VIE Rural Enterprise Finance Project ( ): $80 million ($33 million for household income-generating activities and micro enterprises)

3 Welfare Impact Evaluation Projects: Instruments and Estimation Method Microfinance Sector Development Program in Pakistan ($150 million, ) Rural Enterprise Finance Program in Viet Nam ($168 million, ) Sample of clients and non-clients: PAK = 1,813; VIE = 2,170 Estimation method: Control function regression Y = β 0 + β 1 T + β 2 A + β 3 C + β 4 T A + β 5 T C + β 6 A C + β 7 T A C + ε where: Y = Outcome of interest, T = Indicator for credit provider receiving ADB funds (1=yes, 0=no), A = Indicator for household s location (1=existing service area, 0=planned area), C = Indicator for household s client status (1=client, 0=non-client), and ε = Random error term.

4 Client Borrowing Characteristics Period Annual Average Household Income per Capita ($) Percent below Poverty Line Percent of Loans Borrowed Average Loan ($) Average Household Borrowing per Capita ($) Percent of Loans Invested in Household Incomegenerating Activities Pakistan Project period Post-project Overall Viet Nam Project period , Post-project , Overall 1, ,415 1, = not available. Notes: 1. Amounts are nominal and US dollar equivalent, using the average exchange rate of respective period. 2. Project period: for Pakistan, for Viet Nam. 3. Post-project: for Pakistan, for Viet Nam. 4. Amounts are nominal and US dollar equivalent. Sources: Asian Development Bank Independent Evaluation Department, Evaluation team calculations based on household survey data collected for this study. Average exchange rate for 2011 was taken from the CIA World Factbook. (Accessed 20 June 2012). Exchange rates for were taken from various issues of the Economist Intelligence Unit Country Reports

5 Estimation Results of Welfare s PAKISTAN VIET NAM Outcome Indicator ADB Credit ADB Premium Spillover ADB Credit Spillover Per capita income *** *** Per capita expenditure ** *** Housing quality index Household has enterprise - *** Household enterprise employees - - * ** *** Household enterprise employment growth - - * - - Household enterprise income *** *** Labor force participation, men Labor force participation, women - (*) Household has savings accounts * ** Household savings balance Household used credit post-shock Proportion of boys enrolled Proportion of girls enrolled Education expenditure per enrolled child * Health expenditure per capita Height-for-age indicator for children age years Weight-for-age indicator for children age 0 5 years ** - = not estimated because 100% of sample households had household enterprises and there was no difference across groups, or omitted due to small sample sizes; -= not significant; * = significant at 10%; ** = significant at 5%; *** = significant at 1%; ( ) = negative impact. Source: Asian Development Bank Independent Evaluation Department, Evaluation team estimates based on the household survey data collected for this study.

6 Summary Key Findings Welfare impacts are limited: Almost no significant effects were found in the Pakistan program. There are some effects on household living standards in Viet Nam. No effect on labor force participation, house riskcoping, children education and health. However, there are some positive spillover s on non clients, suggesting a justification for public intervention in microfinance. Trade-off between poverty targeting and effectiveness: In the Viet Nam program, the average loan size was $1,972 and less than 1.5% of the borrowers lived below the national poverty line. In the Pakistan program, the average loan size was at $195 and some 14% of the borrowers lived below the national poverty line. In these two programs, smaller loans were better at targeting the poor, but less effective in producing welfare benefits than larger loans.

7 Full report can be downloaded at: Facebook: Thank you.