Poverty and empowerment impacts of the Bihar Rural Livelihoods Project: Evidence from a Mixed-Methods Cluster-Randomized Trial

This study documents the impact of a government-sponsored livelihoods project using a mixed methods approach within a cluster-randomized trial. Key features of the project were the formation of women’s self-help groups, and the provision of low-cost credit through these groups. The intervention led to a dramatic increase in self-help group membership and take-up of credit through these groups, and a corresponding decline in the use of informal credit. A reduction in average informal lending interest rates was also observed. Two years after initiation of the program, significant positive impacts on asset ownership among landless households were apparent. Impacts on various indicators of women’s empowerment were mixed, and showed no clear direction when aggregated, nor was there any impact on consumption value. Given the reduction in debt service costs achieved both directly through substitution into lower-cost sources of credit and the reduction in informal interest rates, impacts of the intervention on household welfare are expected to continue to accrue over time.