Impact of microfinance on education in sub-Saharan Africa

Carina van Rooyen, Ruth Stewart and Thea de Wet

The impact of microfinance on education in sub-Saharan

Africa: A partnership project with the Institute of Education

INSTITUTE OF EDUCATION SYMPOSIUM ON EDUCATION AND DEVELOPMENT, 14 December 2011 Source: Per H

erbertsson

2

From

http://w

ww

.developmenthorizons.com

/2011_03_01_archive.html

3

Access to microfinance

Invest in the future

Increase income

Increase education,

health, etc.

Lift out of poverty

4

Invest in the future

Improvement in education

Especially if available to women

Paper or plastic?

Review question given

DFID-funded systematic review

6

Peer-reviewed published protocol

Extensive searching & 2-staged screening

Microfinance

Sub-Saharan Africa

Comparative evaluations of the impact on the poor

7

6 000

336

69

35

15

8

Coding

EPPI-Reviewer4

9

Quality appraisalFrom

http://w

ww

.zazzle.co.uk/worlds_bestest_appraiser_tshirt-235669736717655238

From htt

p://runningagile.com/category/esther-derby/

10

Data extraction

From htt

p://ww

w.verylol.com

/extraction-1241/

11

Synthesis

12

Causal chain development

From htt

p://copyprints.blogspot.com/

13

Peer-reviewed published

report

Available at http://www.dfid.gov.uk/r4d/PDF/Outputs/SystematicReviews/MicroFinance_FOR+WEB%5B1%5D.pdf

http://www.dfid.gov.uk/r4d/PDF/Outputs/SystematicReviews/MicroFinance_FOR+WEB%5B1%5D.pdf






14

From htt

p://ww

w.verylol.com

/for-small-cars-

1231/

Details of our 15 included studies

• 4 RCTs 2 quasi-experimental studies 9 with/without studies• 11 = microcredit, 2 = savings, 2

= combined credit & savings• Ethiopia, Ghana, Kenya, Malawi,

Madagascar, Rwanda, South Africa, Tanzania (Zanzibar), Uganda & Zimbabwe

• Rural & urban initiatives

Source

: Per H

erb

ertsso

n

16

RCTs

Micro-savings 2

Micro-credit 2

Micro-credit &savings

-

Scope of the evidence-base

RCTs Quasi-exp With/without

Micro-savings 2 - -

Micro-credit 2 1 8


- 1 1

RCTs Quasi-exp

Micro-savings 2 -

Micro-credit 2 1


- 1

Hierarchy of evidence?

18

Findings – how does microfinance impact on education?

Credit Combinedcredit and savings

Savings

MAYBEgender difference

positive (2)mixed (2)

negative (1) no effect (1)

NOnegative (1) no effect (1)

YESpositive (1)

19

Specific paper

findings

* High quality studies

20

There is some evidence for positive impacts but worryingly there is also evidence that microfinance

does harm by negatively impacting on the education of clients’ children, especially girls

Photo from htt

p://vishwasaha.w

ordpress.com/category/yoga/

21

Savings provision to AIDS-orphaned young people in Uganda has been shown to increase their intention to attend secondary schooling, & their certainty that these plans will come to fruition. These young people also did significantly better in Uganda’s Primary Leaving Examinations than control group (Ssewamala et al 2010)

Photo by Martin G

odwin,

http://w

ww

.guardian.co.uk/katine/katine-chronicles-blog/2010/aug/19/katine-finance-saving

22

Evidence for micro-credit’s impact on household’s expenditure on education is

contradictory: (1) two studies show increased household’s

expenditure on children’s education; (2) two studies find no such effect;

(3) one study finds mixed results with varied positive & negative impacts on

expenditure on education depending on the region

23

On school attendance two studies found reduced attendance amongst micro-credit

clients Data from Malawi shows that micro-credit significantly decreases primary school attendance amongst borrowers’ children

Noteworthy gendered impact: repetition of primary grades in young boys & delayed or lack of enrolment for young girls

In Uganda (high quality study) client households were significantly more likely to have been unable to pay school charges for one or more household members for at least one term during previous two years, hence children had to drop out of school

But micro-credit does not appear to increase child labour, so we presume children are not being taken out of school to work, but because clients have difficulties paying school expenses

24

25

Length of time within micro-credit programme decreases children’s enrolment • Gendered impact: in

Zimbabwe on-going borrowing reduced children’s enrolment in school; proportion of household’s girls aged 6 to 16 in school decreasing more for continuing clients than for departing clients & non-clients

From htt

p://indieintertube.tv/static/episode-length-how-long-should-you-go/#axzz1gSM

CYo00

27

“Credit is like a fire: it is useful to cook your sadza but if you are careless, it will burn your hut.”

Figure

from

http

://ww

w.d

eath

andta

xesm

ag.co

m/1

56359

/can

-micro

finance

-sa

ve-th

e-w

orld

/

Causal pathway analysis

29

Source

: Per H

erb

ertsso

n

30

What we now think is happening

1. Invest in

immediate future:

a. Businessb. Productive

assetsc. Adult

educationd. Workers’

health & nutrition

Micro-credit

Given to individuals or groups

Scope for increased income via business

or employment

Able to repay loan and avoid increase

in debt

Able to save

Spend money differently

Social cohesion

Women’s empowerment

Long-term benefits

Micro-savings

2. Consumptive spending with

scope for productivity:

a. Add on housing

b. Assets which retain value

Improved capabilities

Better able to deal with shocks

3. Invest in long- term future:

a. Children’s education

b. Children’s health and nutrition

4. Consumptive spending (non-

productive):

Assets which do not retain value

Actual increased income

Actual decreased income

Default on loan, lose collateral

and/or forced to borrow more

Use other MFI

FOR CREDIT CLIENTS ONLYInability to repay loan

Determined by external factors:

Entrepreneurial ability

Appropriateness of business in context

Competition from other MFI clients

Gender and power relations

Use same MFI

31


1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit



or employment


in debt

Able to save


Social cohesion


Long-term benefits

Micro-savings



a. Add on housing








productive):






Use other MFI







Use same MFI

32


1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit



Social cohesion


Micro-savings



a. Add on housing


3. Invest in long- term future: a. Children’s education



productive): Assets which do not retain value

33


1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit



or employment


in debt

Able to save


Social cohesion


Long-term benefits

Micro-savings



a. Add on housing








productive):






Use other MFI







Use same MFI

34

1. Invest in

immediate future:


assetsc. Adult


health & nutrition



or employment

Able to save



Long-term benefits



a. Add on housing








productive):




35


1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit



or employment


in debt

Able to save


Social cohesion


Long-term benefits

Micro-savings



a. Add on housing








productive):






Use other MFI







Use same MFI

36

1. Invest in

immediate future:


assetsc. Adult


health & nutrition


Scope for increased income

via business or employment

Able to repay loan and avoid

increase in debt

Able to save


2. Consumptive

spending with scope

for productivity:

a. Add on housing

b. Assets which retain

value








Entrepreneurial abilityAppropriateness of business in context



37

1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit


Able to repay loan and avoid

increase in debt

Able to save


Micro-savings

2. Consumptive spending with scope

for productivity:

a. Add on housing

b. Assets which retain

value

3. Invest in

long- term future:




Actual decreased

income


and/or forced to borrow

more

Use other MFI

Use same MFI

38


1. Invest in

immediate future:


assetsc. Adult


health & nutrition

Micro-credit



or employment


in debt

Able to save


Social cohesion


Long-term benefits

Micro-savings



a. Add on housing








productive):






Use other MFI







Use same MFI

Some of our recommendations

Microcredit rolled out with caution & focussed carefully

on those most likely to benefit

The rhetoric to be scaled back & wild claims

challenged

Microfinance not to be promoted as means of

improving education in SSA

41

More (especially on micro-savings) and better impact evaluations of microfinance

Ongoing discussion of how to deliver pragmatic systematic reviews for

international development

From htt

p://ww

w.verylol.com

/wash-w

hen-dirty-1218/

Your thoughts?

43

Contact us:

[email protected]

[email protected]

Presentation online at

http://www.slideshare.net/carinavr

Source: Per Herbertsson

Acknowledgements

Photos acknowledged on slides

The impact of microfinance on education in SSA by Van Rooyen C et al is licensed under a Creative

Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License



http://creativecommons.org/licenses/by-nc-sa/3.0/

Impact of microfinance on education in sub-Saharan Africa

Education

Transcript of Impact of microfinance on education in sub-Saharan Africa