Discussion paper

DP9811 Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco

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 postexpansion suggest no transformative impacts, but more positive than negative impacts.

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Citation

Angelucci, M, J Zinman and D Karlan (2014), ‘DP9811 Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco‘, CEPR Discussion Paper No. 9811. CEPR Press, Paris & London. https://cepr.org/publications/dp9811