NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Manuela Angelucci, Dean Karlan, Jonathan Zinman

NBER Working Paper No. 19119
Issued in June 2013
NBER Program(s):   LE   LS   DEV

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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Acknowledgments

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Document Object Identifier (DOI): 10.3386/w19119

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