Microcredit Programmes: Who Participates And To That Extent?

Land ceilings, occupational criteria and asset valuations are commonly used for targeting purposes by credit agencies aiming to direct resources to the rural poor. However a mixture of demand and supply side factors leads to the inclusion of a small group of ‘non target’ households in these credit programmes. This paper starts by examining the differing characteristics of the ‘properly targeted’ versus these ‘non eligible’ members. The next section uses multivariate analysis to identify the characteristics, which lead to participation in a credit programme. The second part of the paper looks at the ‘depth’ of participation of programme members using a set of credit based indicators. Differences between ‘correctly targeted’ and ‘non target’ households are examined in terms of ‘participation depth’ and multivariate analysis is again used to shed light on the possible determinants of active participation. [Working Paper Number: 12]