Impact evaluation of Spandana's micro-credit program

Principal Researchers: Profs. Abhijit Banerjee and Esther Duflo (MIT)
Partner Organization: Spandana, Hyderabad

Project Publications: The Miracle of Microfinance? Evidence from a Randomized Evaluation [Updated October 2009]
Banerjee, A. & Duflo, E. et al, May 2009.

While there is much anecdotal evidence on the impact of microfinance, there have been very few rigorous assessments of the extent to which microfinance has improved the lives of the beneficiaries. To avoid issues of non-comparability between microfinance clients and non-clients, this project uses a randomized design to examine the impact of Spandana’s microfinance program in Hyderabad, Andhra Pradesh, on income, consumption, financial services usage, asset ownership, business scale and profitability, and intra-household decision making. This study will provide an understanding of the effects of a microfinance program at the household level and the usage of financial services in particular, which could lead to better financial services product design and the development of complementary non-financial services interventions at the household level. The final aim, of course, is to maximize the impact of microfinance. 104 slums, where Spandana was planning to expand its microcredit program, were selected for the study. A baseline survey was conducted in 20 households in each slum before the program started. 52 slums were then randomly selected in which the microcredit program was implemented. The end-line survey was completed in 2008 and CMF along with the Principal Investigators are currently actively disseminating the project results. Results from the study have been written about in the NYTimes, the Economist and cited by dozens of practitioners and policymakers.

A second endline is currently being conducted to measure longer-term impact of micro-credit.

CMF Research Associates: Angela Ambroz and Sushmita Meka

See some related CMF documents:
# Spandana Policy Memo [PDF]
# Professor Banerjee Presentation at CAB 2010 [PPTX]
# Spandana Baseline Data [zip]
# Analysis of baseline survey, CAB 2008[PPT]
# Evaluating Microfinance: Randomize! (Eye on Microfinance, Issue 1)

See other related articles on this subject:
# The Game Changer Professor Abhijit Banerjee, The Hindustan Times, November 24th 2009
# The Economic Lives of the Poor [PDF, 251KB]
   Banerjee, A. & Duflo, E. 2006. J-PAL, MIT.
# The Economic Lives of the “Middle Classes” [PDF, 82KB], and Tables [PDF, 97KB]
    Banerjee, A. & Duflo, E. 2007. J-PAL, MIT.#
# Dosas by the Dozen - Theory and Evidence of Present Bias in Microenterpreneurs
Spears, Dean

Listen (alongside powerpoint) as Professor Esther Duflo presents on the Spandana Results in July 2009

Spandana Impact Evaluation - Esther Duflo Seminar Part II from Centre for Micro Finance on Vimeo.