Abstract

https://ssrn.com/abstract=2438038
 


 



Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco


Bruno Crepon


National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); IZA Institute of Labor Economics

Florencia Devoto


Paris School of Economics (PSE)

Esther Duflo


Massachusetts Institute of Technology (MIT) - Department of Economics; Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Bureau for Research and Economic Analysis of Development (BREAD)

William Pariente


Catholic University of Louvain (UCL)

May 13, 2014

MIT Department of Economics Working Paper No. 14-14

Abstract:     
This paper reports the results from a randomized evaluation of a microcredit program introduced in rural areas of Morocco starting in 2006 by Al Amana, the country’s largest microfinance institution. Al Amana was the only MFI operating in the study areas during the evaluation period. Thirteen percent of the households in treatment villages took a loan, and none in control villages. Among households identified as more likely to borrow based on ex-ante characteristics, microcredit access led to a significant rise in investment in assets used for self-employment activities (mainly animal husbandry and agriculture), and an increase in profit. But this increase in profit was offset by a reduction in income from casual labor, so overall there was no gain in measured income or consumption. We find suggestive evidence that these results are mainly driven by effects on borrowers, rather than by externalities on households that do not borrow. This implies that among those who chose to borrow, microcredit had large, albeit very heterogeneous, impacts on assets and profits from self-employment activities, but small impact on consumption: we can reject an increase in consumption of more than 10% among borrowers, two years after initial rollout.

Number of Pages in PDF File: 54

Keywords: Microfinance, microcredit

JEL Classification: O16, G21, D21


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Date posted: May 18, 2014 ; Last revised: July 16, 2015

Suggested Citation

Crepon, Bruno and Devoto, Florencia and Duflo, Esther and Pariente, William, Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco (May 13, 2014). MIT Department of Economics Working Paper No. 14-14. Available at SSRN: https://ssrn.com/abstract=2438038 or http://dx.doi.org/10.2139/ssrn.2438038

Contact Information

Bruno Crepon
National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )
92245 Malakoff Cedex
France
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany

Florencia Devoto
Paris School of Economics (PSE) ( email )
48 Boulevard Jourdan
Paris, 75014 75014
France
Esther Duflo (Contact Author)
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-544
Cambridge, MA 02139
United States
617-258-7013 (Phone)
617-253-6915 (Fax)
Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )
Cambridge, MA
United States
HOME PAGE: http://www.povertyactionlab.org/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Bureau for Research and Economic Analysis of Development (BREAD) ( email )
Duke University
Durham, NC 90097
United States
William Pariente
Catholic University of Louvain (UCL) ( email )
Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium
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