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

Dean Karlan and Jonathan Zinman

No 108, Working Papers from Center for Global Development

Abstract: Expanding access to credit is a key ingredient of development strategies worldwide, and the microfinance industry is generally credited with success in helping to alleviate poverty and improve the lives of the poor. But there is less consensus on the role of consumer loans in credit expansion initiatives. In fact, many practitioners and policymakers are skeptical about the benefits of consumer lending. This working paper by CGD non-resident fellow Dean Karlan and Jonathan Zinman estimates the impacts of expanding the consumer credit supply using a South African field experiment in which some loan applicants who had been denied credit were randomly selected to be "unrejected" for a loan. They find that compared to those who did not receive credit, borrowers showed increased employment, reduced hunger and reduced poverty. The loans also appear to have been profitable for the lender. This paper is one in a series of six CGD working papers by Dean Karlan on various aspects of microfinance (Working Paper Nos. 106-111).

Keywords: access to credit; microfinance; consumer loans (search for similar items in EconPapers)
JEL-codes: G21 M20 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2007-01
New Economics Papers: this item is included in nep-afr, nep-ban, nep-dev and nep-mfd
References: Add references at CitEc
Citations: View citations in EconPapers (22)

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http://www.cgdev.org/content/publications/detail/12330

Related works:
Journal Article: Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts (2010)
Working Paper: Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts (2007)
Working Paper: Expanding Credit Access: Using Randomized Supply Decisions To Estimate the Impacts (2007)
Working Paper: Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts (2007)
Working Paper: Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts (2007)
Working Paper: Expanding credit access: Using randomized supply decisions to estimate the impacts (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:108

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