Estimating the Long-Run Impact of Microcredit Programs on Household Income and Net Worth

This paper investigates whether the utilization of microcredit programs has a significant impact on the income and net worth of the participants. Several micro finance institutes are optimistic on the beneficial effects of microcredit programs. Others describe microcredit with interest rates in excess of 20 percent as a poverty trap. This paper uses more than 20 years of panel data on households in Bangladesh to estimate bounds on the causal effects of microcredit programs. The analysis rejects the hypothesis that these microcredit programs are a poverty trap. Moreover, the paper finds moderately positive effects of such programs.

Bibliographic Details

Main Authors:	Woutersen, Tiemen, Khandker, Shahidur R.
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014-09
Subjects:	ACCESS TO FINANCE, BIDS, CONTROL GROUPS, CREDIT ACCESS, CREDIT PROGRAMS, CREDIT SCORING, DUMMY VARIABLE, ECONOMIC DEVELOPMENT, EXCLUSION, FAMILIES, FINANCIAL STUDIES, GENDER, GROUP LENDING, HOUSEHOLD HEAD, HOUSEHOLD INCOME, HOUSEHOLD WELFARE, HOUSEHOLDS, IMPACT EVALUATION, INSTRUMENT, INTEREST RATES, INTERNATIONAL BANK, LONGITUDINAL DATA, MICRO FINANCE, MICROCREDIT, MICROCREDIT LOANS, MICROCREDIT PROGRAM, MICROCREDIT PROGRAMS, MICROENTERPRISES, MICROFINANCE, MICROFINANCE PROGRAM, NET WORTH, POLITICAL ECONOMY, POOR, POOR HOUSEHOLDS, POVERTY REDUCTION, RETURNS, RURAL, RURAL AREAS, RURAL DEVELOPMENT, SAMPLE SIZE, SELECTION BIAS, UNEMPLOYMENT, VILLAGE, VILLAGES,
Online Access:	http://documents.worldbank.org/curated/en/2014/09/20228572/estimating-long-run-impact-microcredit-programs-household-income-net-worth https://hdl.handle.net/10986/20379
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