A frequent problem with studies that purport to measure the impact of voluntary community programs is the skewing that happens as the result of self-selection. Individuals who self-select themselves into microfinance opportunities may be different in ways that are difficult to discern from those who do not. They may be more industrious, wealthier, or of a particular social standing. These social factors make it difficult to measure program impact in terms of outreach and scalability.

In Ghana, IPA is working to measure the dynamics of self-selection with Village Savings and Loan Associations (VLSAs). VLSAs are informal village-based banking structures where group members meet regularly to save, and the collected funds are used to make loans to group members. The study seeks to understand the characteristics of people who participate in VLSAs. What strata of society do they come from? Are they wealthy people who crowd out relatively poorer people? Or do wealthy people already have other financing alternatives? The study also aims to study the impact of the VSLA program on households and communities in Ghana.

This study is conducted with 180 communities selected by our partner as villages in which they could initiate VSLA programs.  Ninety villages (the treatment group) are randomly selected from the list of 180 possibilities; the remaining 90 villages (the control group) are used for comparison.  These groups are compared across a range of socio-economic measures to ascertain the impact of VSLAs on households and communities.  Participation of individuals in VSLAs is tracked by our partner and related back to the data collected in the baseline survey in order to answer the first set of questions regarding selection.