The Effect of the Microcredit Policy of the Government of Benin in Improving Nutrition

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Dedehouanou, Sènakpon Fidèle Ange
Lokonon, Boris Odilon K
Djossou, Gbetoton Nadege
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Many African countries are suffering from food insecurity and undernourishment of the population in the context of imperfect credit markets. Microcredit-related policies have been initiated to address these issues, but the interventions have had mixed effects. In this paper, we assess the extent to which the microcredit to the poorest (MCPG), a microcredit policy of the Government of Benin, has an influence on nutrition. We estimate the household-level and individual-level nutritional impacts using national household survey and demographic, and health survey databases and a modeling framework that accounts for the endogeneity of accessing the MCPG. We find positive linkages between the MCPG and household and individual nutrition outcomes. The largest positive effects are observed among households using microcredit to buy food and among female-headed households. The MCPG would thus benefit not only individual beneficiaries within the household but also the other members through an “insurance” or “investment” channel.