The Impact of Microfinance on Household Welfare in Botswana

Abstract

The study investigated the impact of microfinance on household welfare in Botswana using a nationally representative sample of 503 households and an econometric model adapted from Coleman (1999). The results  suggested that microfinance had no significant effect on household welfare, which is consistent with Okurut and Bategeka (2006); Banerjee et al  (2013); Coleman (1999). Household welfare is positively and significantly influenced by education level, household assets and being in paid  employment in the public/private sectors. The policy implication is that government should continue to explore improvements in the quality of education and creation of employment opportunities in the public/private sectors to improve household welfare in Botswana.However, women’s access to microfinance has led to their empowerment through participation in household expenditure decisions making; being respected by family members and the community; and participation in local leadership activities which addresses the strategic needs of women.

Key Words: Microfinance, Household Welfare, Botswana