Abstract
The poverty alleviation microcredit policy is an important financial poverty alleviation policy that has been widely implemented in China in recent years. However, whether this policy can effectively increase the income of poor households is controversial. In order to measure the implementation effect of the policy, we analyzed the mechanism of the poverty alleviation microcredit on the income of poor households. Then, the paper used micro-survey data to conduct an empirical test using the propensity score matching method to study its effect on the production income of these poor households. The results show that the poverty alleviation microcredit positively affects the production income of poor households, including those who are poor due to lack of funds and poor households with female heads. Therefore, we should continue to implement the poverty alleviation microcredit policy, and establish relevant supporting measures, such as strengthening agricultural production capital subsidies, increasing agricultural production insurance, further improving the implementation efficiency of the poverty alleviation microcredit policy, and increasing the income of poor households.
Highlights
China has become the country with the largest reduction in the number of poverty-stricken people in the world and the first developing country to achieve the poverty reduction goals of the United Nations Millennium Development Goals, with a contribution rate of over 70% to global poverty reduction
Some studies showed that the rural financial market system is not perfect, the loan constraints are widespread, and the agricultural production input of poor households does not exceed the sum of their own assets, capital subsidies, or poverty alleviation microcredit funds
The logit model was used to screen the variables that affect the credit of poor households, select the main variables that affect the credit of these households, and calculate the propensity score (P_score); that is, the conditional probability of poor households to obtain the poverty alleviation microcredit under the condition of a given sample observable characteristic X and to reduce the dimension of matching standard: exp(βXi )
Summary
China has become the country with the largest reduction in the number of poverty-stricken people in the world and the first developing country to achieve the poverty reduction goals of the United Nations Millennium Development Goals, with a contribution rate of over 70% to global poverty reduction. Microcredit can effectively solve the problem of insufficient credit for disadvantaged groups [4], ease the credit constraints of the poor and improve their quality of life [5], and increase the availability of financial services and the ability of the poor population to counter poverty, provide financing opportunities to expand business [6], and increase their income [7,8,9,10]. Poor households can hardly reach the minimum capital scale required by the investment threshold even if they obtain loans, because they receive serious formal financial constraints [17] All these points of view prove that the various study conclusions are controversial and further research on the impact of microcredit for poor households is needed. Combined with the estimated results and the relevant literature, we discuss possible reasons for the poverty alleviation microcredit policies affecting poor household income
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