The Impacts of Microfinance: Evidence from Joint-Liability Lending in Mongolia

American Economic Journal: Applied Economics, 2015, 7(1), 90-122.

33 Pages Posted: 21 Dec 2011 Last revised: 4 May 2015

See all articles by Orazio Attanasio

Orazio Attanasio

University College London - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Britta Augsburg

Institute for Fiscal Studies (IFS); UNU-MERIT

Ralph De Haas

European Bank for Reconstruction and Development; Centre for Economic Policy Research (CEPR); Tilburg University - Department of Finance

Emla Fitzsimons

Institute for Fiscal Studies (IFS)

Heike Harmgart

European Bank for Reconstruction and Development (EBRD)

Date Written: 2015

Abstract

We present evidence from a randomized field experiment in rural Mongolia to assess the poverty impacts of a joint-liability microcredit program targeted at women. We find a positive impact of access to group loans on female entrepreneurship and household food consumption but not on total working hours or income in the household. A simultaneously introduced individual-liability microcredit program delivers no significant poverty impacts. Additional results on informal transfers to families and friends suggest that joint liability may deter borrowers from using loans for noninvestment purposes with stronger impacts as a result. We find no difference in repayment rates between both types of microcredit.

Keywords: microcredit, group lending, poverty, access to finance, randomized field experiment

JEL Classification: O16, G21, D21, I32

Suggested Citation

Attanasio, Orazio and Augsburg, Britta and De Haas, Ralph and Fitzsimons, Emla and Harmgart, Heike, The Impacts of Microfinance: Evidence from Joint-Liability Lending in Mongolia (2015). American Economic Journal: Applied Economics, 2015, 7(1), 90-122., Available at SSRN: https://ssrn.com/abstract=1974414 or http://dx.doi.org/10.2139/ssrn.1974414

Orazio Attanasio

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 20 7679 5880 (Phone)
+44 20 7916 2775 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Britta Augsburg

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

HOME PAGE: http://www.ifs.org.uk/centres/EDePo

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

Ralph De Haas (Contact Author)

European Bank for Reconstruction and Development ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom

HOME PAGE: www.ebrd.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Emla Fitzsimons

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Heike Harmgart

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2EH
United Kingdom

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