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Win Some Lose Some? Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco

  • Angelucci, Manuela
  • Karlan, Dean S.
  • Zinman, Jonathan

Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months post-expansion suggest some good and little harm. Other estimators identify heterogeneous treatment effects and effects on outcome distributions, but again yield little support for the hypothesis that microcredit causes harm.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9506.

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Date of creation: Jun 2013
Date of revision:
Handle: RePEc:cpr:ceprdp:9506
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  1. Karna Basu, 2011. "Hyperbolic Discounting and the Sustainability of Rotational Savings Arrangements," American Economic Journal: Microeconomics, American Economic Association, vol. 3(4), pages 143-71, November.
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  7. Angelucci Manuela, 2008. "Love on the Rocks: Domestic Violence and Alcohol Abuse in Rural Mexico," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-43, October.
  8. Kimball, Miles S & Sahm, Claudia R & Shapiro, Matthew D, 2008. "Imputing Risk Tolerance From Survey Responses," Journal of the American Statistical Association, American Statistical Association, vol. 103(483), pages 1028-1038.
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  12. David McKenzie & Christopher Woodruff, 2008. "Experimental Evidence on Returns to Capital and Access to Finance in Mexico," World Bank Economic Review, World Bank Group, vol. 22(3), pages 457-482, November.
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  14. Lars Ivar Oppedal Berge & Kjetil Bjorvatn & Bertil Tungodden, 2011. "Human and financial capital for microenterprise development: Evidence from a field and lab experiment," CMI Working Papers 1, CMI (Chr. Michelsen Institute), Bergen, Norway.
  15. Augsburg, Britta & de Haas, Ralph & Harmgart, Heike & Meghir, Costas, 2014. "Microfinance at the margin: Experimental evidence from Bosnia and Herzegovina," Discussion Papers, Research Unit: Economics of Change SP II 2014-304, Social Science Research Center Berlin (WZB).
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