PEP-PAGE project

Impact of a rural microcredit scheme
on female empowerment and household vulnerability in Nigeria

This analysis shows that female beneficiaries of microcredit are significantly more empowered than non-beneficiaries and that the household vulnerability of beneficiaries is also reduced in Nigeria. Find out more below, or through the PEP Working Paper 2016-01 and Policy Brief 135


The findings and following policy recommendations of this particular PEP study will inform the design of the national government’s program for female empowerment as well as a new program by the Amoye Microfinance Bank for poverty alleviation through microcredit combined with financial products. The findings were also presented during a national event and reported in the national media. Find out more below, or in the PEP Impact Brief.

Context, issues and objectives

As in many other developing countries, microcredit interventions have been increasingly popular as a means to mitigate credit market failures and to improve welfare in Nigeria, especially amongst the most vulnerable groups and in rural areas where there is a high proportion of unbanked poor.

Although 60% of Nigeria’s population lives in absolute poverty, it is women who are considered the most vulnerable population group as social norms and traditions render them subservient to men. In 2011, the Central Bank of Nigeria set aside funds to be lent to small and medium enterprises through microfinance banks, with the aim of significantly increasing the female population included in the financial system by 2020. By granting women access to credit, the initiative aims to improve their social, economic and political empowerment, as well as their household well-being.

Despite an initial attraction, the promises of microcredit schemes have recently given way to controversy. This is due to the largely inconclusive and limited evidence regarding any impact. Indeed, evidence relating to the impact of microcredit on vulnerability and empowerment is largely dependent on how the outcome indicators are measured and represented. For this reason, the PEP research team in Nigeria set out to provide multidimensional empirical evidence allowing them to evaluate the impact of rural microcredit on household vulnerability and female empowerment.

Research questions, method, and key findings

The PEP research team in Nigeria used data from the follow-up survey of a microfinance initiative. This data source allowed the researchers to take a multidimensional approach to measuring household vulnerability and female empowerment. The team then used a regression discontinuity design to identify the impact of the program.

The researchers’ findings clearly demonstrate the positive impact of microcredit on female empowerment as the beneficiaries experienced:

  • Improved bargaining power and increased capacity for joint household decision making,

  • Increased social capital due to their enhanced ability to network and undertake community activities, which also helped to build their self-confidence, and

  • Increased financial inclusion (through the use of financial services).

The results suggest that the beneficiaries are less vulnerable than non-beneficiaries, as shown by the significant reductions in both the frequency of child labour and food shortage in the household.

The microcredit scheme also generated significant positive indirect effects on the household members of the beneficiaries, who benefited in terms of per capita income, expenditure and savings. 

Furthermore, there was a significant increase in the share of labour income as part of the total household income, an increased number of adults working, and an increased number of hours worked per week in the households of the beneficiaries.

Find out more about the research methods and findings, as well as subsequent policy implications, through the PEP publications posted below - in particular, the Working Paper 2016-01 and Policy Brief 135

Project links and documents

Research team

Find out more about this project - its analytical approach and outcomes - through the following links/documents:
  • Dr. Damilola Olajide
    Initiative for Public Policy Analysis (IPPA)
  • Mrs. Ngozi Ibeji
    Initiative for Public Policy Analysis (IPPA)
  • Ms. Kehinde Omotosho
    Obafemi Awolowo University and IPPA
  • Dr. Olufemi Obembe

This project was launched and initially led by
Dr. Divine Ichenko, who passed away in 2015

PEP Project PMMA-12704 Working Paper 2016-01 (PDF)
Project proposal (Word)

Policy Brief 135 (PDF)


Final report (PDF) Impact brief (PDF)


Policy engagement, consultation, and dissemination

While developing the research project proposal, the team consulted with key policy actors and stakeholders, from the Central Bank of Nigeria and the Amoye Microfinance Bank (AMFB), to the State Ministry of Labour and the National Planning Commission. This allowed the team to address the stakeholders’ specific needs in terms of evidence to inform current policy for financial inclusion and female empowerment. The project raised such interest that two senior officials of the Amoye Microfinance Bank worked directly with the team on the project. 

In December 2015, the team organized their PEP national policy conference in Ikere Ekiti, in collaboration with the AMFB. The event brought together more than 30 participants from across the country and various sectors including policy, academia, civil society, and the media. Attendance by key institutions, such as the National Association of the Microfinance Banks in Nigeria, as well as local businesspeople and representatives of the microcredit beneficiaries, extended the project’s reach.

Following the event, the AMFB announced the decision to design a new program for poverty alleviation through microcredit combined with financial products. The team leader was also appointed to the committee in charge of implementing the initiative.

Soon after, guided by the PEP project’s findings and in consultation with the team leader, the Col. Sunday Akinola Foundation (a local philanthropist) launched the Ikere Women Poverty Alleviation Initiative. The program aims to alleviate poverty through microcredit for female micro-entrepreneurs in the local government area.

Furthermore, following the national policy conference, the Deputy Director of the National Planning Commission expressed great interest in the research results and stated that these findings will inform the design of the national government’s program for female empowerment.

The research project and findings were picked up by the national media with reports in The New Telegraph, The Nigerian Tribune, and The Nation, as well as on Ekiti State Television. Shortly before the national policy conference, the project team leader and the COO of the Amoye Bank were invited as guest speakers on a national television program, Daybreak Nigeria, to discuss the conference and the importance of microcredit as a strategy for poverty alleviation. This appearance triggered various policy responses across the country, including the Deputy Governor of Ekiti State requesting the final research report.

Find out more in the following PEP impact brief.


    PEP-PAGE projects

    The project described above is one of the several projects selected for support under the PEP research and capacity building initiative for Policy Analysis on Growth and Employment (PAGE) in developing countries. The PAGE program is co-funded by UK's Department for International Development (DFID) and Canada's International Development Research Center (IDRC).

    This particular project was selected in May 2014, following the first of three competitive calls for proposals of the PAGE initiative. A total of 65 projects have been selected for support under the three PAGE funding rounds. Find out more

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