Impact Of Microcredit Examined

New research from the Institute for Fiscal Studies has examined the impact of microcredit programmes that have emerged in connection with India’s “Swacch Bharat” or “Clean India” mission.

The study assessed the value of “remuneration-post-verification” subsidies and microcredit investment that support and fund projects that otherwise would not attract capital investment, mostly due to size and verification issues.

Researchers used their own survey data and combined it with government and credit bureau data.

The research offers rigorous evidence of the impacts of microcredit on household sanitation investment and borrowing.

The outcome demonstrates that the very common form of credit plays a critical role in achieving impact. In addition, microcredit can work side-by-side with government “remuneration-post-verification” subsidy programmes. Microcredit programmes can be offered to relax credit constraints on otherwise subsidy  ineligible households and provide a bridge to such subsidy funding.

Read full report here.