Does microfinance reduce poverty in Mauritania? Client-reported economic and social outcomes from the CAPEC savings and credit network

Abstract

Mauritania has treated microfinance as an instrument of poverty reduction since the late 1990s, yet almost no client-level evidence has been published on what the sector actually delivers. This article reports a survey of 237 randomly selected clients of the CAPEC network (Caisses populaires d'épargne et de crédit), the country's largest category-A mutual microfinance network, administered on tablets using ODK and analysed in SPSS. Clients report moderate positive economic and social outcomes: income, nutrition, household equipment and self-confidence score highest, while job creation beyond the household and the capacity to save score below the scale midpoint. Analysis of variance shows that outcomes are associated with the number of successive loan cycles and with the number of workers in the enterprise, and — for social outcomes only — with loan size; they are not associated with the geographical area of the enterprise or with the sector financed. Two findings matter most for practice. First, loans concentrated in petty trade at amounts of 150,000–300,000 ouguiya rarely build productive assets. Second, 68 per cent of clients reported converting their loan into cash outside the terms of the contract, which points to a product-design mismatch rather than to client misconduct. The article sets out what repeat lending, loan sizing and non-financial support would need to look like for the sector to move from consumption smoothing to enterprise growth.