Taking Stock of the Evidence on Micro-Financial Interventions
We review the empirical evidence on microfinance and asset grants to the ultra poor or microentrepreneurs, and assess our ability to account for this evidence using quantitative theory. Properly executed, these interventions can help segments of the population increase their income and consumption, but neither the empirical micro nor quantitative macro literatures give much reason to believe that such interventions can lead to wide-scale, transformative impacts akin to escaping aggregate poverty traps.
We thank our discussant, Stephen Smith, Oriana Bandiera, and the conference participants for useful comments and suggestions. All errors remain our own. The views expressed here do not necessarily reflect the position of the Federal Reserve Banks of Chicago and St. Louis, the Federal Reserve System, or the National Bureau of Economic Research.
Joseph P. Kaboski
Kaboski has research grants from the National Institute of Health and MasterCard Foundation for a separate project involving microfinance and entrepreneurship in Uganda, and a research grant from the International Growth Centre for unrelated research on firms and industrial clusters in China and India.
Taking Stock of the Evidence on Microfinancial Interventions, Francisco J. Buera, Joseph P. Kaboski, Yongseok Shin. in The Economics of Poverty Traps, Barrett, Carter, and Chavas. 2019