Microcredit participation and nutrition outcomes among women in Peru

Abstract

Background: Microcredit services--the awarding of small loans to individuals who are too poor to take advantage of traditional financial services--are an increasingly popular scheme for poverty alleviation. Several studies have examined the ability of microcredit programmes to influence the financial standing of borrowers, but only a few studies have examined whether the added household income improves health and nutritional outcomes among household members. This study examined the hypothesis that longer participation in microcredit services would be associated with better nutritional status in women.

Methods: Cross-sectional data were obtained in February 2007 from 1593 female clients of a microcredit organisation in Peru. The primary predictor variable was length of time as a microcredit client measured in number of completed loan cycles (range 0 to 5.5 years, average loan size US$350). The outcome variables were age-adjusted body mass index (BMI), haemoglobin levels (g/dl) and food insecurity measured using the US household food security survey module. Extensive data on demographic and socioeconomic status were also collected.

Results: Longer microcredit participation was associated with higher BMI (β=0.05, p=0.06), higher haemoglobin levels (β=0.07, p<0.01) and lower food insecurity (β=-0.13, p<0.01). With the inclusion of demographic and socioeconomic variables, the associations with higher haemoglobin (β=0.03, p=0.04) and lower food insecurity (β=-0.08, p<0.01) were sustained.

Conclusion: This study supports the notion that microcredit participation has positive effects on the nutritional status of female clients. Further research should explore more definitive causal pathways through which these effects may occur and should examine the effects on other household members.