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On the Impact of Microcredit: Evidence from a Randomized Intervention in Rural Ethiopia

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  • Jaikishan Desai
  • Kristin Johnson
  • Alessandro Tarozzi
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    Abstract

    We use data from a randomized controlled trial conducted in 2003-2006 in rural Amhara and Oromiya (Ethiopia) to study the impacts of the introduction of micro finance in treated communities. We document that borrowing increased substantially in locations where the programs started their operations, but we find mixed evidence of improvements in a number of socio-economic outcomes, including income from agriculture, animal husbandry, non-farm self-employment, schooling and indicators of women's empowerment.

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    File URL: http://research.barcelonagse.eu/tmp/working_papers/741.pdf
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    Bibliographic Info

    Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 741.

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    Date of creation: Oct 2013
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    Handle: RePEc:bge:wpaper:741

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    Keywords: microcredit; cluster randomized controlled trial; Ethiopia;

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    References

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    1. Karlan, Dean S. & Zinman, Jonathan, 2007. "Expanding Credit Access: Using Randomized Supply Decisions To Estimate the Impacts," CEPR Discussion Papers 6180, C.E.P.R. Discussion Papers.
    2. Manuela Angelucci & Dean Karlan & Jonathan Zinman, 2013. "Win Some Lose Some? Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco," Working Papers 1026, Economic Growth Center, Yale University.
    3. Gibson, John & McKenzie, David & Stillman, Steven, 2009. "The Impacts of International Migration on Remaining Household Members: Omnibus Results from a Migration Lottery Program," IZA Discussion Papers 4375, Institute for the Study of Labor (IZA).
    4. Attanasio, Orazio & Augsburg, Britta & de Haas, Ralph & Fitzsimons, Emla & Harmgart, Heike, 2014. "Group lending or individual lending? Evidence from a randomised field experiment in Mongolia," Discussion Papers, Research Unit: Economics of Change SP II 2014-303, Social Science Research Center Berlin (WZB).
    5. Joseph P. Kaboski & Robert M. Townsend, 2012. "The Impact of Credit on Village Economies," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 98-133, April.
    6. Jaikishan Desai & Alessandro Tarozzi, 2011. "Microcredit, Family Planning Programs, and Contraceptive Behavior: Evidence From a Field Experiment in Ethiopia," Demography, Springer, vol. 48(2), pages 749-782, May.
    7. Abhijit Vinayak Banerjee, 2013. "Microcredit Under the Microscope: What Have We Learned in the Past Two Decades, and What Do We Need to Know?," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 487-519, 05.
    8. Yongseok Shin & Joseph P. Kaboski & Francisco J. Buera, 2011. "Macroeconomics of Microfinance," 2011 Meeting Papers 545, Society for Economic Dynamics.
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    Cited by:
    1. Dean Karlan & Adam Osman & Jonathan Zinman, 2013. "Follow the Money: Methods for Identifying Consumption and Investment Responses to a Liquidity Shock," Working Papers 1034, Economic Growth Center, Yale University.

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