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on Microfinance |
| By: | Abhijit Banerjee; Emily Breza; Esther Duflo; Cynthia Kinnan |
| Abstract: | Can microcredit help unlock a poverty trap for some people by putting their businesses on a different trajectory? Could the small microcredit treatment effects often found for the average household mask important heterogeneity? In Hyderabad, India, we find that “gung ho entrepreneurs” (GEs), households who were already running a business before microfinance entered, show persistent benefits that increase over time. Six years later, the treated GEs own businesses that have 35% more assets and generate double the revenues as those in control neighborhoods. We find almost no effects on non-GE households. A model of technology choice in which talented entrepreneurs can access either a diminishing-returns technology, or a more productive technology with a fixed cost, generates dynamics matching the data. These results show that heterogeneity in entrepreneurial ability is important and persistent. For talented but low-wealth entrepreneurs, short-term access to credit can indeed facilitate escape from a poverty trap. |
| Keywords: | Microfinance, Entrepreneurship, Poverty Trap |
| JEL: | D03 D14 D21 G21 O16 Z13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0832&r=all |
| By: | Talita Greyling; Stephanié Rossouw |
| Abstract: | Background: Since the early 1980s, many governments have investigated the possibility of utilising access to microloans as a pathway to grow economies out of unemployment and thereby improve people's quality of life. Studies that have previously investigated the impact of microloans found a positive relationship to quality of life. Unfortunately, these studies mainly measure quality of life using monetary (income) measures rather than assessing the entire multidimensionality of quality of life.Aim: This paper investigates the relationship between objective multidimensional income-independent quality of life (IIQoL) and having access to micro - and informal loans (M&ILs). Specifically, we focus on South Africa's most marginalized, i.e. 'poor females' and 'poor females residing in rural areas', as their empowerment is a critical social objective, aligned to that of international agencies.Methods: We use a panel dataset spanning four waves from 2008 to 2015 of the National Income Dynamics Study (NIDS). Principal component analysis is used to construct the IIQoL index and various panel; and survey estimation techniques are applied in the regression analyses.Results: M&ILs are significant and negatively related to IIQoL for both; 'poor females' and 'poor females residing in rural areas'. This implies that those 'with' loans failed to translate those monetary gains into higher levels of IIQoL over time.Conclusions: Access to M&ILs does not increase the quality of life of South Africa's most marginalized groups. Without government interventions and education programmes, related to microloans, the marginalized will not experience an increase in their non-income quality of life. |
| Keywords: | quality of life, income-independent measures, microloans, informal loans, South Africa |
| JEL: | C01 C33 O15 O55 R2 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:775&r=all |
| By: | Mazhar Yasin MUGHAL; Mohamed ABDALLAH ALI |
| Abstract: | Does access to microfinance improve household welfare? We seek the answer to this question using data on 2,060 borrower and non-borrower households based in six major urban centers of Djibouti. We construct a composite index of multi-dimensional poverty and carry out estimations using a number of econometric techniques. Our results show that neither access to micro-credit nor its ostensibly productive use is significantly associated with poverty regardless of the duration of time since the loan was acquired. This holds both for access to, and the amount of micro-credit obtained. The results raise doubts on the effectiveness of Djibouti’s microfinance programme. |
| Keywords: | Microfinance, Poverty, Productive Loans, Djibouti |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2019-2020_1&r=all |
| By: | Masayuki Sawada |
| Abstract: | In the context of a randomized experiment with non-compliance, I identify treatment effects without exclusion restrictions. Instead of relying on specific experimental designs, I exploit a baseline survey which is commonly available in randomized control trials. I show the identification of the average treatment effect on the treated (ATT) as well as the local average treatment effect (LATE) assuming that a baseline variable maintains similar rank orders as the control outcome. I then apply this strategy to a microcredit experiment with one-sided non-compliance to identify the ATT. In microcredit studies, a direct effect of the treatment assignment has been a threat to identification of the ATT based on an IV strategy. I find the IV estimate of log revenue for the ATT is 2.3 times larger than my preferred estimate of log revenue. R package ptse is available for this analysis. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.03204&r=all |