IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v7y2015i1p183-203.html
   My bibliography  Save this article

The Impacts of Microcredit: Evidence from Bosnia and Herzegovina

Author

Listed:
  • Britta Augsburg
  • Ralph De Haas
  • Heike Harmgart
  • Costas Meghir

Abstract

We use an RCT to analyze the impacts of microcredit. The study population consists of loan applicants who were marginally rejected by an MFI in Bosnia. A random subset of these were offered a loan. We provide evidence of higher self-employment, increases in inventory, a reduction in the incidence of wage work and an increase in the labor supply of 16-19-year-olds in the household's business. We also present some evidence of increases in profits and a reduction in consumption and savings. There is no evidence that the program increased overall household income. (JEL C93, G21, I38, J23, L25, P34, P36)

Suggested Citation

  • Britta Augsburg & Ralph De Haas & Heike Harmgart & Costas Meghir, 2015. "The Impacts of Microcredit: Evidence from Bosnia and Herzegovina," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 183-203, January.
  • Handle: RePEc:aea:aejapp:v:7:y:2015:i:1:p:183-203
    Note: DOI: 10.1257/app.20130272
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.20130272
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/app/app/0701/2013-0272_app.pdf
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/app/data/0701/2013-0272_data.zip
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/app/ds/0701/2013-0272_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Suresh de Mel & David McKenzie & Christopher Woodruff, 2009. "Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 1-32, July.
    2. Dean Karlan & Jonathan Zinman, 2010. "Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts," Review of Financial Studies, Society for Financial Studies, vol. 23(1), pages 433-464, January.
    3. Marcel Fafchamps & David McKenzie & Simon Quinn & Christopher Woodruff, 2011. "When is capital enough to get female microenterprises growing? Evidence from a randomized experiment in Ghana," CSAE Working Paper Series 2011-11, Centre for the Study of African Economies, University of Oxford.
    4. Orazio Attanasio & Britta Augsburg & Ralph De Haas & Emla Fitzsimons & Heike Harmgart, 2011. "Group lending or individual lending? Evidence from a randomised field experiment in Mongolia," IFS Working Papers W11/20, Institute for Fiscal Studies.
    5. Abhijit Banerjee & Sendhil Mullainathan, 2010. "The Shape of Temptation: Implications for the Economic Lives of the Poor," NBER Working Papers 15973, National Bureau of Economic Research, Inc.
    6. Feigenberg, Benjamin & Field, Erica M. & Pande, Rohini, 2010. "Building Social Capital through Microfinance," Working Paper Series rwp10-019, Harvard University, John F. Kennedy School of Government.
    7. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    8. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
    9. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 311-335.
    10. Joseph P. Kaboski & Robert M. Townsend, 2011. "A Structural Evaluation of a Large‐Scale Quasi‐Experimental Microfinance Initiative," Econometrica, Econometric Society, vol. 79(5), pages 1357-1406, September.
    11. Wydick, Bruce, 1999. "The Effect of Microenterprise Lending on Child Schooling in Guatemala," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 853-869, July.
    12. Jacoby, Hanan G, 1994. "Borrowing Constraints and Progress through School: Evidence from Peru," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 151-160, February.
    13. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emily Breza & Cynthia Kinnan, 2018. "Measuring the Equilibrium Impacts of Credit: Evidence from the Indian Microfinance Crisis," NBER Working Papers 24329, National Bureau of Economic Research, Inc.
    2. Erhardt, Eva Christine, 2017. "Microfinance beyond self-employment: Evidence for firms in Bulgaria," Labour Economics, Elsevier, vol. 47(C), pages 75-95.
    3. Rachael Meager, 2015. "Understanding the Impact of Microcredit Expansions: A Bayesian Hierarchical Analysis of 7 Randomised Experiments," Papers 1506.06669, arXiv.org, revised Jul 2016.
    4. Farah Said, 2016. "Access to Finance and Agency: An Overview of the Constraints to Female-Run Enterprises," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 331-349, September.
    5. Nene Oumou & Jonathan Goyette, 2016. "Can microcredit impact the activity of small and medium enterprises? New evidence from a Regression Discontinuity Design in Panama," Cahiers de recherche 16-05, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    6. Jacobus de Hoop & Furio C. Rosati, 2014. "Cash Transfers and Child Labor," World Bank Research Observer, World Bank Group, vol. 29(2), pages 202-234.
    7. Czura, Kristina, 2015. "Do flexible repayment schedules improve the impact of microcredit? Evidence from a randomized evaluation in rural India," Discussion Papers in Economics 26608, University of Munich, Department of Economics.
    8. Karlan, Dean & Knight, Ryan & Udry, Christopher, 2015. "Consulting and capital experiments with microenterprise tailors in Ghana," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 281-302.
    9. Karlan, Dean & Osman, Adam & Zinman, Jonathan, 2016. "Follow the money not the cash: Comparing methods for identifying consumption and investment responses to a liquidity shock," Journal of Development Economics, Elsevier, vol. 121(C), pages 11-23.
    10. Krislert Samphantharak & Robert M. Townsend, 2018. "Risk and Return in Village Economies," American Economic Journal: Microeconomics, American Economic Association, vol. 10(1), pages 1-40, February.
    11. Brudevold-Newman, Andrew & Honorati, Maddalena & Jakiela, Pamela & Ozier, Owen, 2017. "A Firm of One's Own: Experimental Evidence on Credit Constraints and Occupational Choice," IZA Discussion Papers 10583, Institute for the Study of Labor (IZA).
    12. Popov, Alexander, 2017. "Evidence on finance and economic growth," Working Paper Series 2115, European Central Bank.
    13. Bernhardt, Arielle & Field, Erica & Pande, Rohini & Rigol, Natalia, 2017. "Household Matters: Revisiting the Returns to Capital among Female Micro-entrepreneurs," CEPR Discussion Papers 11981, C.E.P.R. Discussion Papers.
    14. Caroline Krafft, 2016. "Understanding the Dynamics of Household Enterprises in Egypt: Birth, Death, Growth and Transformation," Working Papers 983, Economic Research Forum, revised Mar 2016.
    15. repec:eee:wdevel:v:105:y:2018:i:c:p:189-200 is not listed on IDEAS
    16. Emily Breza & Cynthia Kinnan, 2018. "Measuring the Equilibrium Impacts of Credit: Evidence from the Indian Microfinance Crisis," Working Papers id:12587, eSocialSciences.
    17. Arielle Bernhardt & Erica Field & Rohini Pande & Natalia Rigol, 2017. "Household Matters: Revisiting the Returns to Capital among Female Micro-entrepreneurs," NBER Working Papers 23358, National Bureau of Economic Research, Inc.
    18. repec:eee:wdevel:v:97:y:2017:i:c:p:330-348 is not listed on IDEAS
    19. Furio C. Rosati, 2016. "Can cash transfers reduce child labor?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 293-293, September.
    20. Nathan Fiala, 2017. "Business is Tough, but Family is Worse: Household Bargaining and Investment in Microenterprises in Uganda," Working papers 2017-05, University of Connecticut, Department of Economics.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:7:y:2015:i:1:p:183-203. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.