The Economic Lives of the Microfinanced Poor

This paper uses a household survey conducted with 107 women in Mukono, Uganda receiving microcredit from BRAC, a globally renowned Microfinance Institution. Firstly, I aim to quantify differences between the residents of the district and the recipients of microcredit. Secondly, I will present descriptive analysis of the economic lifestyles of the BRAC respondents. Finally, I will analyze the relationship between length of membership and loan size with income and savings. I found that the differences between the Mukono population and the BRAC sample are particularly pronounced in methods of income generation and education. While 49% of the Mukono population is involved in subsistence agriculture, only 2% of the BRAC respondents are engaged in the activity. The data also revealed that the average BRAC respondent has attained a much higher level of education than that of the average Mukono resident. With an average of 8.8 years of education, the majority of the BRAC respondents finished schooling between primary and secondary level. By contrast, the majority of the Mukono residents did not complete the primary level. This assessment shows that BRAC’s targeted population is very different from the general population. While BRAC claims to alleviate poverty-related issues by providing financial services to the extremely poor, the poorest of the poor are not eligible to receive microcredit.