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Does group inclusion hurt financial inclusion? Evidence from ultra-poor members of Ugandan savings groups

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  • Burlando, Alfredo
  • Canidio, Andrea

Abstract

Millions of ultra-poor households in sub-Saharan Africa rely exclusively on savings groups to meet their financial needs. However, the ability of savings groups to fully meet these needs remains unclear. We randomize at the village level the proportion of ultra-poor members of newly-formed savings groups. We find that scarcity of loanable funds is more severe in poorer groups and affects disproportionately their poorest members. A trade-off emerges between the inclusion of ultra-poor households into a savings group and its ability to provide credit to these same ultra-poor households.

Suggested Citation

  • Burlando, Alfredo & Canidio, Andrea, 2017. "Does group inclusion hurt financial inclusion? Evidence from ultra-poor members of Ugandan savings groups," Journal of Development Economics, Elsevier, vol. 128(C), pages 24-48.
  • Handle: RePEc:eee:deveco:v:128:y:2017:i:c:p:24-48 DOI: 10.1016/j.jdeveco.2017.05.001
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    More about this item

    Keywords

    Savings groups; VSLA; Financial inclusion; Microfinance; Self-help groups;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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