Small Loans and Mental Health in South Africa
Author Information
Author(s): Lia CH Fernald, Rita Hamad, Dean Karlan, Emily J Ozer, Jonathan Zinman
Primary Institution: University of California, Berkeley
Hypothesis
Improved access to a credit program and consequent improvements in socioeconomic status would be associated with positive impacts on mental health.
Conclusion
Access to small loans can have mixed effects on psychological stress and depressive symptoms, particularly differing by gender.
Supporting Evidence
- 53% of applicants receiving a second look were approved for loans.
- Men showed reduced depressive symptoms but increased perceived stress after receiving loans.
- Women did not show significant changes in depressive symptoms or perceived stress.
Takeaway
Giving people small loans can help some feel less sad, but it can also make them feel more stressed, especially for men.
Methodology
Randomized controlled trial with 257 applicants who were previously rejected for loans, assessed 6-12 months later for mental health indicators.
Potential Biases
Potential selection bias due to the nature of the sample being marginal loan applicants.
Limitations
The study's sample may not represent all borrowers, and the mental health measures used have not been validated in South Africa.
Participant Demographics
Approximately half female, over two-thirds of African descent, less than a quarter with education beyond high school.
Statistical Information
P-Value
p<0.05
Confidence Interval
95% CI, 0.04, 1.23 for perceived stress; 95% CI, 0.13, 1.43 for depressive symptoms.
Statistical Significance
p<0.05
Digital Object Identifier (DOI)
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