Microfinance loans, women’s economic empowerment, and poverty: a case study of Baobab Microfinance Company

ABSTRACT We investigate the impact of Baobab Microfinance Company (BMC) loans on poverty and economic empowerment of female clients using a mixed methods approach. Using a sample of 411 BMC clients, we find in some cases, relative lower poverty and higher economic empowerment for clients with a higher frequency of loans compared to those with a lower frequency of loans. An implication is that the marginal impact of loans across different loan cycles is U-shaped rather than linear and has a short-term impact on clients. Furthermore, our qualitative results suggest that loans help women lower poverty and become economically empowered.