Microfinance and Entrepreneurship at the Base of the Pyramid

41 Pages Posted: 12 Jun 2015 Last revised: 1 Aug 2018

See all articles by Jasjit Singh

Jasjit Singh

INSEAD

Pushan Dutt

INSEAD - Economics and Political Sciences

Date Written: August 1, 2018

Abstract

Using a proprietary dataset on microfinance, we examine household-level outcomes associated with using microcredit to support entrepreneurship at the base of the pyramid (BOP). While small loans meant for funding income-generating activities are associated with positive economic outcomes, those specifically for funding microenterprise do not necessarily produce better outcomes than those for funding traditional means of livelihood. Further, loans for starting new microenterprises fare worse than those for growing existing microenterprises. This suggests that lack of complementary resources and skills might work against BOP microenterprises, highlighting a need to refine models targeting promoting microenterprise merely through indiscriminate access to credit.

Keywords: Microenterprise, Access to Finance, Microcredit, Base of the Pyramid (BOP), Emerging Economies, Economic Development

Suggested Citation

Singh, Jasjit and Dutt, Pushan, Microfinance and Entrepreneurship at the Base of the Pyramid (August 1, 2018). INSEAD Working Paper No. 2018/30/STR/EPS. Available at SSRN: https://ssrn.com/abstract=2616746 or http://dx.doi.org/10.2139/ssrn.2616746

Jasjit Singh (Contact Author)

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Pushan Dutt

INSEAD - Economics and Political Sciences ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore
65-6799-5498 (Phone)

HOME PAGE: http://faculty.insead.edu/pushan-dutt/

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