An Impact Evaluation of BRAC's Microfinance Program in Uganda

This paper uses survey data and quantitative analysis to assess the economic impact of BRAC Uganda’s microfinance program on participants. The study finds that BRAC’s program seems to confer significant positive benefits to borrowers. These include an increase in total savings and assets, greater consumption in the form of more expensive and nutritious food, and the resources and incentives to start a household business. My results also suggest that participating in microfinance increases welfare and could be a valid strategy for promoting development in Uganda. The results of the analysis vary considerably depending on the statistical technique used. These non-robust results, combined with issues during data collection that prevented proper randomization, make it difficult to make causal claims about the effect of BRAC’s microfinance program in this context. In addition to ensuring proper randomization, future studies should be spread over a multi-year period to determine the long-term effects of microfinance on borrowers. Additionally, because BRAC’s strategy often involves using microcredit as a platform to deliver other development services, more studies are needed that examine the effects of microfinance combined with the other interventions BRAC Uganda promotes. Lastly, future work should seek to better understand the population BRAC’s programs are reaching.