@article{Berhane:51472,
      recid = {51472},
      author = {Berhane, Guush and Gardebroek, Cornelis},
      title = {Does microfinance reduce rural poverty? Evidence based on  household panel data from northern Ethiopia},
      address = {2009},
      number = {1005-2016-79223},
      series = {Contributed paper},
      pages = {26},
      year = {2009},
      abstract = {This paper evaluates the long-term impact of microfinance  credit from the intensity of
participation in borrowing. We  use a four-round panel data set on 351 farm households that  had
access to microfinance in northern Ethiopia. Over the  years 1997-2006, with three-year intervals,
households are  observed on key poverty indicators: improvements in annual  consumption and
housing improvements. The relatively long  duration in the panel enables to measure household
poverty  changes between consecutive periods and see the long-run  effects of exposure to
microfinance from the intensity of  participation borrowing. The fixed-effects model  is
innovatively modeled to account for potential selection  biases due to both time-invariant and
time-varying  unobserved individual household heterogeneities. Results  show that microfinance
borrowing indeed causally increased  consumption and housing improvements. A more  flexible
specification that allows for the number of times  the household has been in borrowing also shows
that  repeated borrowing is effectively increasing consumption:  the longer the borrowing
relationship the larger the effect  partly due to lasting credit effects. Impact estimates that  do not
account for such dynamic effects may therefore  undermine the effect of MFI borrowing.},
      url = {http://ageconsearch.umn.edu/record/51472},
      doi = {https://doi.org/10.22004/ag.econ.51472},
}