Impact of Access to Microcredit on the WellBeing of Households and Poverty Change in Cameroon: 2001-2007

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Nadege, Ngah Otabela
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African Economic Research consortium
Using data from the second and third Cameroonian household surveys, this study analyzes the relationship between access to microcredit, household wellbeing, and poverty change in Cameroon. It uses a combination of two methods of analysis: the instrumental variable method for controlling the potential endogeneity of access to increased microcredit by correcting for selection bias; and a method for breaking down poverty change into intra-growth, intra-redistribution, and inter-sector mobility components based on Shapley's value. The latter is based on comparison of evidence-based and hypothetical/ non-factual distributions. The key findings reveal that access to microcredit: (i) significantly and positively affects the level of well-being of households and financial inclusion, particularly through education; (ii) has an impact on poverty change and that this effect is brought about by the redistribution component and primary sector; (iii) positively and significantly influences the intra-sector redistribution component of poverty change through the intra-sector growth and mobility components.