Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco
40 Pages Posted: 2 Jun 2014
Date Written: February 2014
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, but more positive than negative impacts.
Keywords: Compartamos Banco, microcredit, microcredit impact, microentrepreneruship
JEL Classification: D12, D22, G21, O12
Suggested Citation: Suggested Citation