Microfinance-Discussion Session Intervention in Post-Conflict Central African States

Over the last twenty years micro-finance based interventions have proven to be a popular and often effective means of improving the economic outcomes of impoverished women. However, the gains to microfinance based interventions on women's decision making in both economic and non-economic arenas remains largely unknown. Specifically, the question of to what extent does access to small-scale credit alone, rather than other programs often combined with microfinance, affect women's empowerment is of particular interest when determining interventions in a variety of setting in developing nations. There exists evidence that women's empowerment is associated with reduced violence and as such maybe an important tool for improving adult women's wellbeing. In addition increased decision making power by women has been associated with improvement in children's health outcomes, especially for girls, and as such may be way generating intergenerational improvements in women's outcomes.

The goal of this project is to disentangle the effects of access to credit alone from the information on financial and personal decision making that is frequently coupled with these programs. To accomplish this, the investigators use a randomized field experiment among participants in Village Savings and Loans Associations (VSLA's). VSLA participants are a self-selected group of people who pool their money into a fund from which members can borrow. The money is paid back with interest, causing the fund to grow. The regular savings contributions to the VSLA are deposited with an end date (usually less than 1 year) after which all or part of the total funds are distributed to the individual members. The small loans are paid back with interest which is determined by the group at the time of formation and the returns from these interest payments are also distributed to the groups. The investigators then test whether there are additional gains to women's well-being by providing VSLA participants with training on process-based decision making to determine if there is a need for additional efforts to improve the decision making structure in households. To the extent that increased access to credit and more broadly financial resources is limited by existing constraints on women's decision making power, this additional training may be a necessary part of the creation of credit markets in improving the health and well-being of women and children.