This study examines whether household access to microfinance reduces poverty,
and if so, to what extent and across which dimensions of wellbeing. The study
draws on first-hand observations and empirical data gathered from interviews of
1,132 households across 11 districts in the rural areas of the province of Punjab
in Pakistan. It employs a quasi-experimental research design and makes use of
data collected by interviewing both borrower (treatment) and non-borrower
(control) households. Sample selection biases are controlled by matching
propensity scores. Findings reveal that although borrowers seem to fare better
than non-borrowers across around 70 percent of the indicators, a majority of
these are not statistically significant. This suggests that despite producing some
degree of positive impact, microfinance institutions still have to make sustained
efforts to bring about real difference to the livelihoods of the poor.