Study Details | Pathways to Work

26601-Microfinance in the

Study quality: High

High

Reason for the rating: This study received a high study quality rating because it is a low-attrition randomized controlled trial with no known issues that suggest the findings cannot be attributed to the intervention.

Intervention: Grameen America Program

Population and employment barriers:

Sex (Female)

Services provided:

Financial education, Training

Setting: Tested in multiple settings

Study design

Design:

Cluster randomized controlled trial

Study group formation:

Potential borrowers formed groups of five to participate in the program. Randomization of these five-person loan groups to intervention and comparison conditions occurred before any services were delivered (that is, before the Grameen America group attended continuous group training). From March 2014 to March 2017, 1,492 women in 300 loan groups enrolled in the evaluation. After a slow recruitment period using a 50/50 recruitment ratio, the evaluation team changed the ratio to 80/20 and later to 65/35. The statistical analysis adjusts for these changes. Overall, 70 percent of the sample participants were assigned to the intervention.

Time period of study:

The study enrolled participants between March 2014 and March 2017; this report presented early evidence from six-month surveys, through September 2017. An interim evaluation report is scheduled to be released in 2020, and a final report will be available in 2021.

Primary outcome domains examined:

Increase short-term employment

Other outcome domains examined:

Material hardship; type of employment (self-employed and/or working for an employer); participant credit score

Study funded by:

The Robin Hood Foundation funds the Grameen America evaluation; the study report was funded by Citi Community Development.

Results

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Outcome domain	Measure	Timing	Study quality by finding	Comparison group mean	Intervention group mean	Impact	Units	Sample size
Increase short-term earnings	Monthly earnings for the latest elapsed month of the follow-up period	18 months	High	1,961.00	2,326.00	365.00	2017 dollars	1,114
Increase short-term employment	Currently employed	18 months	High	92.00	98.90	6.90	percentage points	1,144
Decrease short-term benefit receipt	Household receives any public assistance benefits	18 months	High	69.90	61.80	1.90	percentage points	1,139

Short-term outcomes are those measured 18 months or fewer after participants are first offered services. Long-term outcomes are those measured between 18 months and 5 years after participants are first offered services. Very long-term outcomes are those measured 5 years or more after participants are first offered services.

Findings quality key:

High
Moderate

Study quality terms?

The findings quality describe our confidence that a given study’s finding is because of the intervention. We do not display findings that rate low.

Findings key:

A moderate-to-large favorable finding that is unlikely to be due to chance
A moderate-to-large favorable finding that might to be due to chance
A small favorable finding that is unlikely to be due to chance
A small favorable finding that might be due to chance
A favorable finding that is unlikely to be due to chance, but we cannot determine the standardized effect size
A favorable finding that might be due to chance, but we cannot determine the standardized effect size
A moderate-to-large unfavorable finding that is unlikely to be due to chance
A moderate-to-large unfavorable finding that might to be due to chance
A small unfavorable finding that is unlikely to be due to chance
A small unfavorable finding that might be due to chance
An unfavorable finding that is unlikely to be due to chance, but we cannot determine the standardized effect size
An unfavorable finding that might be due to chance, but we cannot determine the standardized effect size
A finding that is unlikely to be due to chance, but we cannot determine the standardized effect size or direction
A finding of no effect that might be due to chance

Favorable findings are impacts in a direction that is socially desirable. Statistical significance indicates the likelihood that a study finding is due to the intervention, rather than due to chance. Findings are described as moderate-to-large if the intervention produced a sufficiently large change in the outcome. An impact receives this designation if the standardized effect size is equal to or greater than 0.25 or equal to or less than -0.25.

Sample characteristics

The program serves women with incomes below the federal poverty line. At program entry, the average participant was 41 years old, Hispanic or Latina (99 percent), and not born in the United States (91 percent). One-quarter (27 percent) felt that they spoke English well. Half (50 percent) were working for an employer, and 73 percent were operating their own business. About two-thirds were parents of a child at home. For two-thirds, their highest credential earned was a high school diploma or GED certificate. Potential borrowers had to form groups of five to participate in the program.

Age

Mean age

41 years

Sex

Female

100%

Participant race and ethnicity

Unknown, not reported, or other	2%
Hispanic or Latino of any race	99%

The race and ethnicity categories may sum to more than 100 percent if the authors reported race and ethnicity separately; in these cases, we report the category White, rather than White, not Hispanic.

Participant employment and public benefit status

Had low incomes

100%

Participant education

Had a high school diploma or GED

66%

Specific employment barriers

Were immigrants

91%

Intervention implementation

Implementing organization:

Grameen America, a nonprofit organization.

Program history:

Grameen America opened its first branch in 2008 in Queens, NY. Its model is based on and similar to the Grameen Bank microfinance lending program in Bangladesh in the 1970s. As of September 2018, Grameen America operated 20 branches in 13 cities in the United States.

Intervention services:

The Grameen America program is a microfinance model that provides loans to women with low incomes in the United States who are seeking to start or expand their small businesses. Potential borrowers form a group of five to participate in the program. All five individuals in the group are required to know each other, live near each other, and each have a business purpose for a loan. The group members do not need to plan to operate similar businesses; each group member seeks an individual loan. Groups assigned to the intervention condition then enroll in Grameen America's mandatory continuous group training in which borrowers learn about interest rates, loan repayments, savings, credit establishment, asset accumulation, and the merits and risks of loans. Each member of the group then receives a loan from Grameen America and invests those loans to start or expand a business. Borrowers meet weekly with Grameen America staff to make loan repayments, continue training, and network with peers.

Mandatory services:

Participation in the continuous group training and weekly meetings with Grameen America staff were both mandatory to receive the loan from Grameen America.

Comparison services:

Service receipt duration:

The study did not describe how long participants receive services.

Intervention funding:

Not known

Study publications

Schaberg, Kelsey, Victoria Quirroz-Becera, Toni Castro-Cosio, Stephen Nunez, and Hendra, Richard (2019). Microfinance in the United States: Early impacts of the Grameen America program. New York: MRDC. Available at https://www.mdrc.org/sites/default/files/Grameen_Report_final-web.pdf

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The Pathways Clearinghouse refers to interventions by the names used in study reports or manuscripts. Some intervention names may use language that is not consistent with our style guide, preferences, or the terminology we use to describe populations.

Study of the Grameen America Program