Microfinance at the Microfinance at the margin: experimental evidence from Bosnia and Herzegovina vidence from Bosnia and Herzegovina
AbstractWe use a randomised controlled trial (RCT) to analyse the impact of microcredit on poverty reduction in Bosnia and Herzegovina. The study population are loan applicants that would normally have just been rejected based on regular screening. We find that access to credit allowed borrowers to start and expand small-scale businesses. Households that already had a business and where the borrower had more education, ran down their savings, presumably to complement the loan and to achieve the minimum amount necessary to expand their business. In less-educated households, however, consumption went down. A key new result is that there was a substantial increase in the labour supply of young adults (16-19 year olds). This was accompanied by a reduction in school attendance.
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Bibliographic InfoPaper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 146.
Length: 40 pages
Date of creation: Sep 2012
Date of revision:
Publication status: Published in Working papers 146, European Bank for Reconstruction and Development
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Microfinance; liquidity constraints; human capital; randomised controlled trial;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-EXP-2012-09-22 (Experimental Economics)
- NEP-HME-2012-09-22 (Heterodox Microeconomics)
- NEP-MFD-2012-09-22 (Microfinance)
- NEP-TRA-2012-09-22 (Transition Economics)
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