1 Using Non-Experimental Methods To Evaluate The Impact of

Bangladesh is well known for its pioneering provision of microfinance programs, principally in the form of tiny collateral-free loans to poor women. This paper evaluates the impact of microfinance on household consumption using a new, large and unique cross-section data set. It employs a number of non-experimental impact evaluation techniques, e.g., instrumental variables and propensity score matching. The findings indicate that the effects of micro loans are not robust across all groups of poor household borrowers. It appears that the poorest of the poor participants are among those benefiting most from the scheme. The results hold across different specifications and methods, and when corrected for various sources of selection bias including possible spillover effects