Does Microfinance Increase Food Security? Evidence from Nepal

Abstract

This paper estimates the impact of participation in a microfinance program on household food security using primary data from Nepal. We also disentangle the relationship by gender. Using variants of propensity score matching to adequately address endogeneity of our treatment variable, we find evidence that microfinance has a positive effect on household food security measured by food consumption score. We also present evidence of significant increase in household food security when women are program participants. In comparison, we find no significant gender difference in the effect of microfinance on household food security status.