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Medium and Long-Term Participation in Microcredit: An Evaluation Using a New Panel Dataset from Bangladesh

  • Islam, Asadul

The objective of this paper is to estimate the impacts of medium- and long-term participation in microcredit programs. It utilises a new and large panel dataset collected from treatment and control households from 1997 to 2005. The data enables us to identify continuing participants in the program as well as newcomers and leavers. We employ different estimation strategies including triple-difference and propensity score matching methods to control for selection bias. The impact estimates indicate that the benefits from microcredit vary more than proportionately with the duration of participation in a program. Larger benefits are realized from longer-term participation, and that the benefits continue to accrue beyond departure from the program. The findings indicate the need to observe longer periods of participation to provide a reliable basis for assessing the effectiveness of microcredit lending.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24950.

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Date of creation: 29 Apr 2010
Date of revision:
Handle: RePEc:pra:mprapa:24950
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  1. 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.
  2. 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.
  3. Joseph P. Kaboski & Robert M. Townsend, 2005. "Policies and Impact: An Analysis of Village-Level Microfinance Institutions," Journal of the European Economic Association, MIT Press, vol. 3(1), pages 1-50, 03.
  4. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of income Dynamics," Economics Working Paper Archive 379, The Johns Hopkins University,Department of Economics.
  5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  6. James Heckman & Jeffrey Smith & Christopher Taber, 1998. "Accounting For Dropouts In Evaluations Of Social Programs," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 1-14, February.
  7. Coleman, Brett E., 1999. "The impact of group lending in Northeast Thailand," Journal of Development Economics, Elsevier, vol. 60(1), pages 105-141, October.
  8. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2001. "Lost but Not Forgotten: Attrition and Follow-up in the Indonesia Family Life Survey," Journal of Human Resources, University of Wisconsin Press, vol. 36(3), pages 556-592.
  9. Thomas, D. & Frankenberg, E. & Smith, J.P., 2000. "Lost But Not Forgotten Attribution and Follow-up in the Indonesian Family Life Survey," Papers 00-03, RAND - Labor and Population Program.
  10. Joshua D. Angrist, 1995. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," NBER Working Papers 5192, National Bureau of Economic Research, Inc.
  11. Falaris, Evangelos M., 2003. "The effect of survey attrition in longitudinal surveys: evidence from Peru, Cote d'Ivoire and Vietnam," Journal of Development Economics, Elsevier, vol. 70(1), pages 133-157, February.
  12. Ahlin, Christian & Jiang, Neville, 2008. "Can micro-credit bring development?," Journal of Development Economics, Elsevier, vol. 86(1), pages 1-21, April.
  13. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
  14. Martin Ravallion & Emanuela Galasso & Teodoro Lazo & Ernesto Philipp, 2005. "What Can Ex-Participants Reveal about a Program’s Impact?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
  15. Zhao, Zhong, 2006. "Matching Estimators and the Data from the National Supported Work Demonstration Again," IZA Discussion Papers 2375, Institute for the Study of Labor (IZA).
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