Socioeconomic impacts of microcredit: the case of Nossocrédito in Espírito Santo, Brazil

Abstract

This paper aims to check the impacts of a state microcredit program — Nossocrédito of Espírito Santo, Brazil — on socioeconomic indicators. In order to do it it is estimated three distinct models to evaluate: i) if Nossocrédito has been directed to the cities of lesser degree of development and/or located inside the state; ii) if the program has contributed to improve the municipal development; iii) if Nossocrédito has contributed to reduce poverty. The estimates were conducted with the Ordinary Least Squares method and uses municipal data from 2006 up to 2010. The main results are: i) Nossocrédito is directed to the municipalities of the countryside, but not for those of lesser degree of development; ii) the program contributes to the improvement of the municipal development indicator used; iii) Nossocrédito does not contribute to poverty reduction.