| Abstract: |
This study investigates the impacts of a government-led microcredit program in
the People’s Republic of China (PRC) which was implemented at scale in poor
rural areas, using a randomized controlled trial (RCT). In contrast to recent
RCT-based studies that found no evidence of significant increases in income
from microcredit interventions, we find that the Chinese program significantly
raises household income and reduces poverty. We explore possible explanations
for why the estimated impacts may be greater in the PRC, including larger loan
size, lump sum repayments, lower interest rates, less access to formal credit
before the program, and greater returns from credit constrained off-farm
employment opportunities. |