This page contains the findings of systematic reviews undertaken by review groups linked to the EPPI Centre
A study of microfinance in Sub-Saharan Africa  found that micro-credit and micro-savings make some people poorer and not richer. Clients save more, but also spend more. Health generally increases and, for some, access to food and nutrition. Impacts on education are varied, with limited evidence for positive effects and considerable evidence that micro-credit may be doing harm, reducing the education of clients’ children. Micro-credit may empower some women, whilst both micro-credit and micro-savings improve clients’ housing. There is little available evidence about the impact on job creation or social cohesion. Clients’ failure to increase their income, determined by external factors as well as how they spend their money, can lead clients into further debt, unable to invest in savings and reliant on further cycles of credit. Successful increases in income, repayment of loans and the accumulation of financial wealth are all feasible, but the analysis shows how these are not always achieved. mMcro-credit and micro-savings are doing harm, as well as good, to the lives of the poor whom they purport to serve. Cautious implementation and further rigourous evaluation are required if these interventions are to alleviate rather than deepen poverty.
A second review, with a wider geographical base  found only evaluations of poor quality and inadequate to address the issues. Both reports recommend more research.
A third review covered micro-credit, micro-savings and micro-leasing :
- No studies were found of the impact (positive or negative) of micro-leasing, either on engagement in economic opportunities or on the financial outcomes of such engagement.
- Micro-credit sometimes increases engagement in economic opportunities, but not always. Micro-credit can also increase income in some circumstances, but reduce it in others. It has similarly mixed impacts on levels of savings and accumulation of assets, and in most cases reduces expenditure, although the advantages or disadvantages of the latter are not entirely clear.
- The study found no evidence that micro-savings enables engagement in economic opportunities, although in some cases, but not all, it increases income, savings, expenditure and the accumulation of non-financial assets.
- Even when combined, the provision of micro-savings and micro-credit has little impact on clients’ engagement in economic opportunities. Combined services have mixed impacts on income, the accumulation of non-financial assets and on expenditure. There is little evidence about the impact of combined services on levels of savings. There is not enough evidence to ascertain whether or not these financial interventions have different impacts at the individual, household or business levels, nor can we identify patterns in the exact circumstances in which microfinance has positive impacts for clients. Based on the studies in this review it is not possible to tell whether group or individual lending models are more effective forms of micro-credit.
- It is also not possible to tell whether combining micro-credit, micro-leasing or micro-savings with other complementary interventions such as business training makes a difference.
- Whilst some reviewed studies targeted women specifically and others disaggregated outcomes by gender, there is not enough evidence to allow us to conclude on whether financial interventions targeted at women are more or less effective for them.
The review concluded that future research needed to concentrate on identifying how, and in what circumstances, these financial inclusion interventions can work for the poor. More research is also required which explores different models of microfinance in order to provide more valuable informative evidence to guide decisions around which models are funded and implemented in which circumstances.
A review on economic transfers to women  likewise found the evidence on micro-credit controversial and inconclusive.
A quantitative review of interventions in South Asia  examined a variety of indicators and classified them in terms of three possible outcomes: economic outcomes, social outcomes and empowerment of women. Meta-analysis indicated positive evidence of increase in income, education, women’s empowerment and employment: an increase in participants’ asset creation and consumption/expenditure; higher school-enrolment rates, although this was more pronounced for girls’ education; and improvements in the decision-making power of women. However, the effects were small. The narrative synthesis indicated:
- a dampening of seasonal variations in agricultural incomes.
- increased consumption due to asset creation.
- that micro-savings for women had a significant impact on their individual expenditure in Bangladesh.
- no significant difference between participants and non-participants for food consumption.
- varied evidence on the impact on education and poverty reduction.
- little evidence of increase in employment at village level.
The review concluded that microfinance programmes should emphasise micro-enterprise-linked interventions, incorporating credit-plus programmes with components of training, exposure and mentoring, in addition to micro-savings and/or microcredit, leading either to employment or group enterprise, or asset creation for sustained benefits. Income- and consumption-smoothing initiatives would be of benefit, as would gender-based targeting.
A parallel qualitative review  reported on studies conducted in India, Bangladesh, and Afghanistan with mainly women beneficiaries. Microcredit was the most common model offered and was delivered in the majority of studies using group-lending and self-help group models. In some studies, microcredit was offered along with additional programme elements such as educational, skills and/or training components. Microsavings, group microsavings, and microinsurance were also offered in a small number of included studies. Many of the experiences of the beneficiaries fit into three interrelated areas: empowerment; social and personal impact; and financial and economic impact. Household and community attitudes and beliefs contribute to the way microfinance programme participation is experienced within these three areas;it appears that the interplay between beneficiaries’ positive and negative experiences and the views of other household and community members is an important factor for how beneficiaries decide to initiate, continue or terminate their microfinance programme participation. Positive experiences of microfinance appear to be based upon three fundamental principles:
- Microfinance should enable the most vulnerable to become co-contributors to their family and community where empowerment is intrinsic to the positive experiences of women in particular.
- Microfinance programmes should aim to include strategies that assist beneficiaries to develop social capital through the development of relevant skills and knowledge.
- Financial and economic management experience is cumulative, and has a key role in improving beneficiaries’ self-confidence, their households’ level of support, and positive wider community sentiment.
Without the integration of these themes, beneficiaries may be more vulnerable to negative experiences and outcomes such as loss of family/community support or social status.
A review of index-based micro-insurance for management of weather-related risks  found that, despite the small number of studies and the diverse contextual environments, there were some notable patterns:
- Higher liquidity and income levels available to the household were found to be positively associated with take-up. A lower level of income diversification appears positively associated with insurance demand.
- Financial literacy is positively correlated with interest in insurance.
- Familiarity and trust in the external agent or organisation selling the insurance product and trust in the insurance are also associated with higher levels of take-up.
- Higher levels of yield and rainfall variability are associated with greater interest in index-based insurance products.
- Higher levels of risk aversion are associated with lower interest in index-based micro-insurance.
- A preference for group-based insurance policies over household-based policies was noted in one study.
- It was shown that focusing promotional materials on vulnerability, group/family responsibilities or network-based trust can affect the demand for insurance.
- One study found that insurance cover was associated with greater purchases of fertiliser, and that having to pay for the insurance product, rather than it being offered free, increased the impact on fertiliser purchases.
1. What is the impact of microfinance on poor people? A systematic review of evidence from sub-Saharan Africa (2011)
2. What is the evidence of the impact of microfinance on the well-being of poor people? (2011)
3. Do micro-credit, micro-savings and micro-leasing serve as effective financial inclusion interventions enabling poor people, and especially women, to engage in meaningful economic opportunities in low- and middle-income countries? A systematic review of the evidence (2012)
4. The impact of economic resource transfers to women versus men: a systematic review (2012)
5. The effectiveness of index-based micro-insurance in helping smallholders manage weather-related risks (2012)
6. What is the impact of microfinance on the wellbeing of the poor and what are the conditions for making microfinance work for the poor in South Asia? A systematic review (2016)
7. People’s views and experiences of participating in microfinance interventions: A systematic review of qualitative evidence (2016)