The Miracle of Microfinance? Evidence from a Randomized Evaluation
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Banerjee_The miracle.pdf
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Author(s)
Banerjee, Abhijit
Duflo, Esther
Glennerster, Rachel
Kinnan, Cynthia
Date Issued
January 2015
Journal
American Economic Journal: Applied Economics
Publisher
American Economic Association
Citation
Banerjee, Abhijit, Esther Duflo, Rachel Glennerster, and Cynthia Kinnan. “The Miracle of Microfinance? Evidence from a Randomized Evaluation.” American Economic Journal: Applied Economics 7, no. 1 (January 2015): 22–53. © American Economic Association
Version
Final published version
Abstract
This paper reports results from the randomized evaluation of a group-lending microcredit program in Hyderabad, India. A lender worked in 52 randomly selected neighborhoods, leading to an 8.4 percentage point increase in takeup of microcredit. Small business investment and profits of preexisting businesses increased, but consumption did not significantly increase. Durable goods expenditure increased, while "temptation goods" expenditure declined. We found no significant changes in health, education, or women's empowerment. Two years later, after control areas had gained access to microcredit but households in treatment area had borrowed for longer and in larger amounts, very few significant differences persist.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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DOI of Published Version
https://doi.org/10.1257/app.20130533
