Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco

Bruno Crépon, Florencia Devoto, Esther Duflo and William Parienté ()

No 20144, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper reports the results from a randomized evaluation of a microcredit program introduced in rural areas of Morocco starting in 2006 by Al Amana, the country's largest microfinance institution. Al Amana was the only MFI operating in the study areas during the evaluation period. Thirteen percent of the households in treatment villages took a loan, and none in control villages. Among households identified as more likely to borrow based on ex-ante characteristics, microcredit access led to a significant rise in investment in assets used for self-employment activities (mainly animal husbandry and agriculture), and an increase in profit. But this increase in profit was offset by a reduction in income from casual labor, so overall there was no gain in measured income or consumption. We find suggestive evidence that these results are mainly driven by effects on borrowers, rather than by externalities on households that do not borrow. This implies that among those who chose to borrow, microcredit had large, albeit very heterogeneous, impacts on assets and profits from self-employment activities, but small impact on consumption: we can reject an increase in consumption of more than 10% among borrowers, two years after initial rollout.

JEL-codes: D21 G21 O16 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-dev, nep-exp and nep-mfd
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Citations: View citations in EconPapers (16)

Published as Bruno Crépon & Florencia Devoto & Esther Duflo & William Parienté, 2015. "Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 123-50, January.

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Journal Article: Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco (2015)
Working Paper: Estimating the impact of microcredit on those who take it up: Evidence from a randomized experiment in Morocco (2014)
Working Paper: Estimating the impact of microcredit on those who take it up: Evidence from a randomized experiment in Morocco (2014)
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