Impact of Microfinance on Household Welfare in Northern Chin State of Myanmar

Abstract

This study undertakes an assessment of the impact of Myanmar microfinance programs on household welfare in terms of the household income from, expenditure on and consumption of rice by using data from a quasi-experimental survey conducted in the Northern Chin State of Myanmar. The single impact equation used for the econometric analysis is derived from the household utility function and conditional demand equation. The results prove that the microfinance loan did not contribute to the borrowers’ welfare through their income generation activities, because of the insufficient loan available. However, it did solve short term daily survival issues especially in terms of food. The lack of market opportunities is a major constraint on the agricultural households when trying to generate income. This study found that the welfare of the households as well as the social and economic goals of the microfinance institutions set up by the NGOs, failed, in a country which does not create sufficient market opportunities.