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Microfinance and Poverty Alleviation

Author

Listed:
  • Augsburg, B.
  • de Haas, R.

    (Tilburg University, Center For Economic Research)

  • Harmgart, H.
  • Meghir, C.

Abstract

Abstract: We use an RCT to analyze the impact of microcredit on poverty reduction. The study population consists of loan applicants to a large microfinance institution in Bosnia and Herzegovina who would have been rejected through regular screening. Access to credit allowed borrowers to start and expand small-scale businesses. THe re is little evidence that this lead to net increases in household income. Households that already had a business and where the borrower had more education, ran down savings, presumably to complement the loan and achieve the minimum investment amount. In less-educated households, where assets were low consumption went down instead. For these households the labor supply of teenage children aged 16-19 increased, and their school attendance declined.

Suggested Citation

  • Augsburg, B. & de Haas, R. & Harmgart, H. & Meghir, C., 2013. "Microfinance and Poverty Alleviation," Discussion Paper 2013-075, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:de1a02e2-7943-41ae-bf31-b5dbf4fc115d
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Microfinance; liquidity constraints; human capital; randomized controlled trial;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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