Complementarities in microcredit and financial services interventions for financial inclusion and empowerment: evidence from randomised evaluation in South West Nigeria

Publication Details

3ie Funded Evaluation, DPW1.1023. A link to the completed study will appear here when available.

Damilola Olajide, Maria L. Alzua, Ricardo N. Bebczuk
Institutional affiliations
None specified
Grant-holding institution
None specified
Sub-Saharan Africa (includes East and West Africa)
None specified
Public Financial Management
Gender analysis
Public Financial Management
Gender analysis
Equity Focus
Evaluation design
Randomised Control Trials (RCT)
Ongoing 3ie Funded Studies
3ie Funding Window
Development Priorities Window 1


The study evaluates the impact of microcredit and the existence of complementarities between demand-side (microcredit) and supply-side interventions (digital banking services) in the credit market in Nigeria.


Using microcredit as a tool for poverty alleviation and inclusive growth through empowerment of the poor and financially excluded subgroups in the population has gained increasing attention in recent years. However, there is still no hard evidence that microcredit has a substantial transformative effect for poverty alleviation. In addition, there is a controversy about whether microcredit alone works. With the focus on women micro-entrepreneurs, the results of the study will contribute to building awareness among policymakers and other stakeholders in Nigeria, particularly relating to the financial needs, and initiate a policy dialogue on how these can enhance women’s empowerment, and alleviate household poverty.

Research questions

The impact evaluation will answer the following questions:

  1. Does microcredit combined with digital banking services offer incremental impacts over what the demand side alone (microcredit) would have offered?
  2. Do these impacts differ between economic empowerment and household vulnerability amongst the beneficiaries?
  3. Do the impacts of the complementary interventions (if any) exhibit some pattern of heterogeneity (e.g. type of business)?
  4. What is the nature and extent of externalities generated by the complementary interventions (e.g. on household members, local community)? How do these (if any), affect the overall impact of the interventions?
  5. What is the relative cost effectiveness of the complementary interventions?


Intervention design

The intervention to evaluate is the Amoye Digital Microcredit Initiative for Women Empowerment. This initiative follows a group-lending model where women micro-entrepreneurs organised themselves in groups called Egbe). It includes demand-side (microcredit) and supply-side components (digital banking services) targeted at women micro-entrepreneurs for poverty reduction through (i) economic empowerment, and (ii) reduction in household vulnerability.

Theory of change

Poverty reduction resulting from microcredit is assumed to come through either increase in household income that empowers beneficiaries, reduced vulnerability (i.e. ability to mitigate socioeconomic risks when they occur), or both. In addition, access to digital microcredit (i.e. ATM digital services) enhances business transactions by shifting cash-based transactions to digital transactions, which in terms of outputs, connect microcredit beneficiaries to affordable and sustainable financial tools, and drive their access to financial products in the formal sector (e.g. insurance).

Evaluation design

The study includes two treatment arms: microcredit only , microcredit and digital financial services , and a pure control group. The experiment follows a randomised clusters design with blocking, in which eligible beneficiaries (micro-entrepreneur women) are nested within groups (i.e. lending groups), nested within the five fixed blocks in which the community is traditionally organised.

Each lending-group will be composed of about ten eligible beneficiaries. Clustering will be at the lending-group level. A total of 375 clusters (about 75 clusters per block) will be randomly selected from the number of possible clusters in each block. One-hundred and seventy-five clusters will be assigned to the control group, 100 to the first treatment arm and 100 to the second treatment arm. To account for possible spillovers, a randomised saturation  design is used in treatment clusters. In the first stage, in each treatment arm, clusters are randomly assigned into two saturations (or treatment intensities): 0% treatment and 50% treatment. The second stage uses realisations of the first stage to randomly assign eligible beneficiaries to treatment arms. This implies a total of 175 clusters assigned to the control group, 100 clusters assigned to the first treatment arm with 50 per cent treatment saturation, and 100 clusters assigned to the second treatment arm with 50 per cent treatment saturation. The total sample size is 3,750 women micro-entrepreneurs. The power calculation guarantees a minimum of 18 per cent increase in community household income. 

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