Principal Investigators: Abhijit Banerjee (MIT), Esther Duflo (MIT)
Research Team: Sneha Stephen
LEAD Centre: Centre for Microfinance (CMF)
Focus Area: Credit
Project Geography: Hyderabad, Andhra Pradesh, India
Partner: Spandana Microfinance
Status: Completed


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 has been conducted to measure longer-term impact of micro-credit.

Related Resources:
Spandana Policy Memo
Professor Banerjee Presentation at CAB 2010
Endline I Survey Questionnaires
Endline II Survey Questionnaires
Spandana Baseline Data
Spandana Endline Data-I
Spandana Endline Data-II
Analysis of baseline survey, CAB 2008
Project Data