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.
Approval from the Yale University Human Subjects Committee, IRB #0808004114 and from the Innovations for Poverty Action Human Subjects Committee, IRB #061.08June-008. Thanks to Tim Conley for collaboration and mapping expertise. Thanks to Innovations for Poverty Action staff, including Kerry Brennan, Ellen Degnan, Alissa Fishbane, Andrew Hillis, Hideto Koizumi, Elana Safran, Rachel Strohm, Braulio Torres, Asya Troychansky, Irene Velez, Glynis Startz, Sanjeev Swamy, Matthew White, and Anna York, for outstanding research and project management assistance. Thanks to Dale Adams, Abhijit Banerjee, Esther Duflo, Jake Kendall, Melanie Morten, David Roodman and participants in seminars at Berkeley ARE, M.I.T./Harvard, Institute for Fiscal Studies- London, IPA Microfinance Conference-Bangkok, Georgetown-Qatar, University of Warwick, University of Stockholm, and NYU for comments. Thanks to Compartamos Banco, the Bill and Melinda Gates Foundation and the National Science Foundation for funding support to the project and researchers. All opinions are those of the researchers, and not of the donors, Compartamos Banco, or the National Bureau of Economic Research. The research team has retained complete intellectual freedom from inception to conduct the surveys and estimate and interpret the results.
Manuela Angelucci & Dean Karlan & Jonathan Zinman, 2015. "Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 151-82, January. citation courtesy of