Evaluating the impact of training in a national microfinance program: Self help groups in India

Presented by: Dr Ranjula Bali Swain (Department of Economics, Uppsala University).

Abstract 

This paper evaluates the impact of widespread training programs provided by the Self Help Group (SHG) program. Indian SHGs are mainly NGO-formed microfinance groups but funded by commercial banks. The paper employs evaluation techniques appropriate for current borrowers of a national program. Additionally, the paper addresses the double selection issue of membership and training. We correct for membership selection bias with a pipeline method. We then account for training endogeneity with propensity score matching. The results of regression adjusted matching (which controls for both participation and training selection bias) reveal that training aids in asset accumulation but not income generation. Specialized training such as business training has a greater impact on assets than general training. Sensitivity analyses also confirm the robustness of these results.