Microcredit and consuption smoothing: a study on the role of microcredit on consumption smootjing against health and income shocks
Date
2011-10
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Abstract
When unforeseen shocks occur, poor households face a much greater risk, threatening the economic productivity of the Major Major illnesses and lower levels of income due to the loss of job of the household head cause an increase in variability in In consumption patterns. In this paper, we test whether microcredit has a role to play in consumption smoothing when health In income shocks occur. In general, results show that families who face health shocks are able to smooth their consumption using microcredit loans, even Income the presence of health insurances. Income shocks, on the other hand, are not insured because households were found using these loans to pay off previous debt obligations or for business start-ups/expansion.
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Keywords
Microcredit, Poor household, Poverty