The Miracle of Microfinance? Evidence from a Randomized Evaluation
Open accessAbstract
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. (JEL G21, G31, O16, O12, L25, I38)
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Experimental Analysis of Neighborhood Effects
Kling, J. R., Liebman, J. B., & Katz, L. F. (2007) · Econometrica · doi:10.1111/j.1468-0262.2007.00733.x · Cited by 2,719 · see citing works
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Beyond baseline and follow-up: The case for more T in experiments
McKenzie, D. (2012) · Journal of Development Economics · doi:10.1016/j.jdeveco.2012.01.002 · Cited by 871 · see citing works
Integrating microfinance and health strategies: examining the evidence to inform policy and practice
Leatherman, S., Metcalfe, M., Geissler, K., & Dunford, C. (2012) · Health Policy and Planning · doi:10.1093/heapol/czr014 · Cited by 137 · see citing works
Creating Responsible Subjects: The Role of Mediated Affective Encounters
Bajde, D., & Rojas-Gaviria, P. (2021) · Journal of Consumer Research · doi:10.1093/jcr/ucab019 · Cited by 78 · see citing works
How education empowers women in developing countries
Le, K., & Nguyen, M. (2021) · The B.E. Journal of Economic Analysis & Policy · doi:10.1515/bejeap-2020-0046 · Cited by 74 · see citing works
Stimulating Microenterprise Growth: Results from a Loans, Grants and Training Experiment in Uganda
Fiala, N. (2013) · SSRN Electronic Journal · doi:10.2139/ssrn.2358086 · Cited by 37 · see citing works
- Authors
- Banerjee, A., Duflo, E., Glennerster, R., & Kinnan, C.
- Affiliations
- National Bureau of Economic Research (US)
- Abdul Latif Jameel Poverty Action Lab (US)
- Northwestern University (US)
- Venue
- American Economic Journal: Applied Economics
- Publisher
- American Economic Association
- Published
- 2015-01-01
- Volume
- 7
- Issue
- 1
- Pages
- 22-53
- ISSN
- 1945-7782 (ISSN-L)
- 1945-7790
- OpenAlex
- W3121502504
- Cited by
- 2,076
- References
- 1
- Citations by year
- 2026: 77 · 2025: 143 · 2024: 136 · 2023: 126 · 2022: 129 · 2021: 211 · 2020: 193 · 2019: 130 · 2018: 123 · 2017: 138 · 2016: 139 · 2015: 115 · 2014: 129 · 2013: 106 · 2012: 89
- FWCI
- 420.60
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- American Economic Journal Applied Economics (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- DSpace@MIT (Massachusetts Institute of Technology) (submittedVersion, cc-by-nc)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Northwestern University
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Microfinance and Financial Inclusion
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
- Keywords
- microfinance, microcredit, group lending, small business investment, household consumption, health outcomes, educational outcomes, women's empowerment, Hyderabad
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