Determination of vulnerability and risk management in microcredit programs: applying risk sharing model and panel data approach

This research aims to determine the household vulnerability in two microcredit programs, namely Women Microcredit Fund (WMF) and Self-Financed groups (SF). The panel data of monthly consumption and income for a sample of 280 households were collected in Fars province. Risk-sharing framework was used for determination of vulnerability of each households and groups. Results showed that two groups were accepted risk sharing. Moreover, 48 and 45 percent of member households was vulnerable in WMF and SF groups, respectively. Also, the vulnerability of member households in SF groups and non-member households in WMF was more than others. According to the results, microcredit programs can reduce and share the risk of household consumption, so expansion of them seems necessary.