Working Paper: NBER ID: w19827
Authors: Manuela Angelucci; Dean Karlan; Jonathan Zinman
Abstract: Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months postexpansion suggest no transformative impacts.
Keywords: Microcredit; Randomized Trial; Economic Outcomes; Social Indicators
JEL Codes: D12; D22; G21; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| microcredit access (O16) | likelihood of ever borrowing from Compartamos (G51) |
| microcredit access (O16) | total net borrowing (H69) |
| microcredit access (O16) | outstanding debt (H63) |
| microcredit access (O16) | profits (L21) |
| microcredit access (O16) | household income (D19) |
| microcredit access (O16) | overall business performance (L25) |
| microcredit access (O16) | school attendance (I21) |
| microcredit access (O16) | female decision-making power (J16) |