Expanding Microenterprise Credit Access: Randomized Supply Decisions to Estimate the Impacts in Manila
AbstractMicrocredit seeks to promote business growth and improve well-being by expanding access to credit. We use a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila. The effects are diffuse, heterogeneous, and surprising. Although there is some evidence that profits increase, the mechanism seems to be that businesses shrink by shedding unproductive workers. Overall, borrowing households substitute away from labor (in both family and outside businesses), and into education. We also find substitution away from formal insurance, along with increases in access to informal risk-sharing mechanisms. Our treatment effects are stronger for groups that are not typically targeted by microlenders: male and higher-income entrepreneurs. In all, our results suggest that microcredit works broadly through risk management and investment at the household level, rather than directly through the targeted businesses.
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Bibliographic InfoPaper provided by Yale University, Department of Economics in its series Working Papers with number 68.
Date of creation: Jul 2009
Date of revision:
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- D20 - Microeconomics - - Production and Organizations - - - General
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-12-11 (Agricultural Economics)
- NEP-ALL-2009-12-11 (All new papers)
- NEP-DEV-2009-12-11 (Development)
- NEP-ENT-2009-12-11 (Entrepreneurship)
- NEP-MFD-2009-12-11 (Microfinance)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Mothership of Microfinance Impact Studies has landed
by philmader in governance across borders on 2011-08-19 15:48:30
- Xavier Gine & Pamela Jakiela & Dean Karlan & Jonathan Morduch, 2006.
Framed Field Experiments
00150, The Field Experiments Website.
- Gine, Xavier & Jakiela, Pamela & Karlan, Dean & Morduch, Jonathan, 2006. "Microfinance games," Policy Research Working Paper Series 3959, The World Bank.
- Dean Karlan & Xavier Gine & Jonathan Morduch & Pamela Jakiela, 2006. "Microfinance Games," Working Papers 936, Economic Growth Center, Yale University.
- Xavier Gine & Pamela Jakiela & Dean Karlan & Jonathan Morduch, 2006. "Microfinance Games," Working Papers 2102, The Field Experiments Website.
- Xu, Lisa & Zia, Bilal, 2012. "Financial literacy around the world : an overview of the evidence with practical suggestions for the way forward," Policy Research Working Paper Series 6107, The World Bank.
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