The Impacts of Microcredit: Evidence from Bosnia and Herzegovina

American Economic Journal: Applied Economics (2015), 7(1), 183-203.

21 Pages Posted: 10 Dec 2013 Last revised: 4 May 2015

See all articles by Britta Augsburg

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

Heike Harmgart

European Bank for Reconstruction and Development (EBRD)

Costas Meghir

Yale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: 2015

Abstract

We use an RCT to analyze the impacts of microcredit. The study population consists of loan applicants who were marginally rejected by an MFI in Bosnia. A random subset of these were offered a loan. We provide evidence of higher self-employment, increases in inventory, a reduction in the incidence of wage work and an increase in the labor supply of 16–19-year-olds in the household’s business. We also present some evidence of increases in profits and a reduction in consumption and savings. There is no evidence that the program increased overall household income.

Keywords: Microfinance; liquidity constraints; human capital; randomized controlled trial

JEL Classification: O16, G21, D21, I32

Suggested Citation

Augsburg, Britta and De Haas, Ralph and Harmgart, Heike and Meghir, Costas, The Impacts of Microcredit: Evidence from Bosnia and Herzegovina (2015). American Economic Journal: Applied Economics (2015), 7(1), 183-203.. Available at SSRN: https://ssrn.com/abstract=2365438 or http://dx.doi.org/10.2139/ssrn.2365438

Britta Augsburg (Contact Author)

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

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

Heike Harmgart

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

One Exchange Square
London, EC2A 2EH
United Kingdom

Costas Meghir

Yale University ( email )

37 Hillhouse avenue
New Haven, CT CT 06511
United States
+12034323558 (Phone)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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