Who Benefits the Most from Micro-Credit? Micro-Level Evidence from Sub-Saharan Africa

James, Emmanuel Onoh, Bakas, Dimitrios, Thompson, Piers and Ebireri, John (2025) Who Benefits the Most from Micro-Credit? Micro-Level Evidence from Sub-Saharan Africa. World Development, 193. 107023. ISSN 0305-750X

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Abstract

This paper moves beyond typical mean effect analysis to examine who truly benefits from micro-credit. Utilising household-level panel data from 2010 to 2019 for a sample of Sub-Saharan African countries, via a quantile panel framework, we show that micro-credit has positive outcomes for households below specific welfare levels in low and lower-middle income countries. Conversely, the impact is less pronounced for wealthier households. Our results highlight inequalities in welfare outcomes, particularly favouring households in low to median quantiles. Notably, the effects of micro-credit vary across countries’ welfare levels, with significant impacts observed in low income countries. Policy recommendations emphasise targeting micro-credit interventions towards low to median welfare households to enhance welfare outcomes.