Journal of Food Security
ISSN (Print): 2372-0115 ISSN (Online): 2372-0107 Website: http://www.sciepub.com/journal/jfs Editor-in-chief: Apply for this position
Open Access
Journal Browser
Go
Journal of Food Security. 2020, 8(3), 89-97
DOI: 10.12691/jfs-8-3-2
Open AccessArticle

Does Microfinance Increase Food Security? Evidence from Nepal

Md. Adnan Shahid1, and Alok Bohara1

1Department of Economics, University of New Mexico, Albuquerque, New Mexico, USA

Pub. Date: October 13, 2020

Cite this paper:
Md. Adnan Shahid and Alok Bohara. Does Microfinance Increase Food Security? Evidence from Nepal. Journal of Food Security. 2020; 8(3):89-97. doi: 10.12691/jfs-8-3-2

Abstract

This paper estimates the impact of participation in a microfinance program on household food security using primary data from Nepal. We also disentangle the relationship by gender. Using variants of propensity score matching to adequately address endogeneity of our treatment variable, we find evidence that microfinance has a positive effect on household food security measured by food consumption score. We also present evidence of significant increase in household food security when women are program participants. In comparison, we find no significant gender difference in the effect of microfinance on household food security status.

Keywords:
microfinance food security food consumption score treatment effects

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]  Khandker, S. R. (2005). Microfinance and poverty: Evidence using panel data from Bangladesh. The World Bank Economic Review, 19(2), 263-286.
 
[2]  Pitt, M. M., & Khandker, S. R. (1998). The impact of group-based credit programs on poor households in Bangladesh: Does the gender of participants matter?. Journal of political economy, 106(5), 958-996.
 
[3]  Banerjee, A., Duflo, E., Glennerster, R., & Kinnan, C. (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7(1), 22-53.
 
[4]  Banerjee, A., Karlan, D., & Zinman, J. (2015). Six randomized evaluations of microcredit: Introduction and further steps. American Economic Journal: Applied Economics, 7(1), 1-21.
 
[5]  Roodman, D., & Morduch, J. (2014). The impact of microcredit on the poor in Bangladesh: Revisiting the evidence. Journal of Development Studies, 50(4), 583-604.
 
[6]  Cheston, S., & Kuhn, L. (2002). Empowering women through microfinance. Draft, Opportunity International, 64.
 
[7]  Schurmann, A. T., & Johnston, H. B. (2009). The group-lending model and social closure: microcredit, exclusion, and health in Bangladesh. Journal of health, population, and nutrition, 27(4), 518.
 
[8]  Hermes, N., & Lensink, R. (2011). Microfinance: its impact, outreach, and sustainability. World development, 39(6), 875-881.
 
[9]  Bhuiya, M. M. M., Khanam, R., Rahman, M. M., & Nghiem, H. S. (2016). Impact of microfinance on household income and consumption in Bangladesh: empirical evidence from a quasi-experimental survey. The Journal of Developing Areas, 50(3), 305-318.
 
[10]  Dunford, C. (2006). Evidence of microfinance's contribution to achieving the millennium development goals (pp. 1-23). Davis, CA: Freedom from Hunger, USA.
 
[11]  Imai, K. S., Arun, T., and Annim, S. K. (2010). Microfinance and household poverty reduction: New evidence from India. World Development, 38(12):1760-1774.
 
[12]  Imai, K. S., Gaiha, R., Thapa, G., and Annim, S. K. (2012). Microfinance and poverty—a macro perspective. World Development, 40(8):1675-1689.
 
[13]  Littlefield, E., Morduch, J., & Hashemi, S. (2003). Is microfinance an effective strategy to reach the millennium development goals?. Focus note, 24(2003), 1-11.
 
[14]  Murshid, N. S., Akincigil, A., & Zippay, A. (2016). Microfinance participation and domestic violence in Bangladesh: results from a nationally representative survey. Journal of interpersonal violence, 31(9), 1579-1596.
 
[15]  Sultana, H. Y., Jamal, M. A., & Najaf, D. E. (2017). Impact Of Microfinance On Women Empowerment Through Poverty Alleviation: An Assessment Of Socio-Economic Conditions In Chennai City Of Tamil Nadu. Asian Journal For Poverty Studies (Ajps), 3(2).
 
[16]  Bidisha, S. H., Khan, A., Imran, K., Khondker, B. H., and Suhrawardy, G. M. (2017). Role of credit in food security and dietary diversity in bangladesh. Economic Analysis and Policy, 53:33-45.
 
[17]  Islam, A., Maitra, C., Pakrashi, D., & Smyth, R. (2016). Microcredit programme participation and household food security in rural Bangladesh. Journal of Agricultural Economics, 67(2), 448-470.
 
[18]  Crépon, B., Devoto, F., Duflo, E., & Parienté, W. (2015). Estimating the impact of microcredit on those who take it up: Evidence from a randomized experiment in Morocco. American Economic Journal: Applied Economics, 7(1), 123-50.
 
[19]  Karlan, D., & Zinman, J. (2011). Microcredit in theory and practice: Using randomized credit scoring for impact evaluation. Science, 332(6035), 1278-1284.
 
[20]  Augsburg, B., De Haas, R., Harmgart, H., & Meghir, C. (2015). The impacts of microcredit: Evidence from Bosnia and Herzegovina. American Economic Journal: Applied Economics, 7(1), 183-203.
 
[21]  Banerjee, A. V. (2013). Microcredit under the microscope: what have we learned in the past two decades, and what do we need to know?. Annu. Rev. Econ., 5(1), 487-519.
 
[22]  McCarter, E. (2006). Women and microfinance: why we should do more. U. Md. LJ Race, Religion, Gender & Class, 6, 353.
 
[23]  WFP (2008). VAM Technical Guidance Sheet. Food Consumption Analysis.
 
[24]  WFP (2015). Technical Guidance Note Food Consumption Score Nutritional Quality Analysis (FCS-N).
 
[25]  Wiesmann, D., Bassett, L., Benson, T., & Hoddinott, J. (2009). Validation of the world food programme s food consumption score and alternative indicators of household food security. Intl Food Policy Res Inst.
 
[26]  Bennett, L., Dahal, D. R., & Govindasamy, P. (2008). Caste ethnic and regional identity in Nepal: Further analysis of the 2006 Nepal Demographic and Health Survey.
 
[27]  Sam, A. S., Abbas, A., Padmaja, S. S., Kaechele, H., Kumar, R., & Müller, K. (2019). Linking Food security with household’s adaptive capacity and drought risk: Implications for sustainable rural development. Social Indicators Research, 142(1), 363-385.
 
[28]  Antonakis, J., Bendahan, S., Jacquart, P., & Lalive, R. (2010). On making causal claims: A review and recommendations. The Leadership Quarterly, 21(6), 1086-1120.
 
[29]  Austin, P. C. (2011). An introduction to propensity score methods for reducing the effects of confounding in observational studies. Multivariate behavioral research, 46(3), 399-424.
 
[30]  Basu, A., Polsky, D., & Manning, W. G. (2008). Use of propensity scores in non-linear response models: the case for health care expenditures (No. w14086). National Bureau of Economic Research.
 
[31]  Thavaneswaran, A. (2008). Propensity score matching in observational studies. Manitoba Center for Health Policy. Retrieved from: http://www.umanitoba.ca/faculties/health_sciences/medicine/units /community_healthsciences/departmental_units/mchp/protocol/me dia/propensity_score_matching. pdf.
 
[32]  Greenland, S., Pearl, J., & Robins, J. M. (1999). Causal diagrams for epidemiologic research. Epidemiology, 37-48.
 
[33]  Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics: An empiricist's companion. Princeton university press.
 
[34]  Imbens, G. W. (2004). Nonparametric estimation of average treatment effects under exogeneity: A review. Review of Economics and statistics, 86(1), 4-29.
 
[35]  Garrido, M. M., Kelley, A. S., Paris, J., Roza, K., Meier, D. E., Morrison, R. S., & Aldridge, M. D. (2014). Methods for constructing and assessing propensity scores. Health services research, 49(5), 1701-1720.
 
[36]  Chemin, M. (2008). The benefits and costs of microfinance: evidence from Bangladesh. The journal of development studies, 44(4), 463-484.