Access to credit and gendered welfare outcomes in a fragile state: Evidence from the Democratic Republic of Congo

This study examines the relationship between access to credit and gendered welfare outcomes in the Democratic Republic of Congo (DRC), a fragile and conflict-affected setting characterised by weak institutions, informal finance, and persistent socio-economic inequality. Drawing on theories of liquidity constraints, intra-household bargaining, and structural vulnerability, the study analyses two welfare dimensions using data from 1,243 households and 2,876 children aged 6–18. Youth welfare is measured by permanent school dropout, while women’s welfare is proxied by household asset accumulation, with particular attention to female-headed households. The analysis applies Ordinary Least Squares (OLS), inverse propensity weighting (IPW), and instrumental variable (IV) techniques, with IPW estimates treated as the primary basis for inference. The findings show that education-targeted credit is associated with lower school dropout among girls, while general credit has no meaningful association with schooling outcomes. The study further finds no significant association between credit access and asset accumulation among female-headed households, whereas male-headed households experience only modest and context-specific asset gains. Overall, the results suggest that financial inclusion alone is unlikely to generate transformative welfare gains in fragile settings without complementary institutional, market, and gender-sensitive support mechanisms.