Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila

Abstract

Microcredit seeks to promote business growth and improve well-being by expanding access to credit. We use a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila. The effects are diffuse, heterogeneous, and surprising. Although there is some evidence that profits increase, the mechanism seems to be that businesses shrink by shedding unproductive workers. Overall, borrowing households substitute away from labor (in both family and outside businesses), and into education. We also find substitution away from formal

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@inproceedings{Karlan2009ExpandingMC, title={Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila}, author={Dean Karlan and Jonathan Zinman and D J R Duthie and Mike Duthie and Eula Ganir and Kareem Haggag and Tomoko Harigaya}, year={2009} }