Unlocking the Benefits of Credit through Saving

Sanghamitra W. Mukherjee, Lauren F. Bergquist, Marshall Burke and Edward Miguel

No 29542, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Access to microcredit has been shown to generate only modest average benefits for recipient households. We study whether other financial market frictions—in particular, lack of access to a safe place to save—might limit credit's benefits. Working with Kenyan farmers, we cross-randomize access to a simple savings product with a harvest-time loan. Among farmers offered a loan, the additional offer of a savings lockbox increased farm investment by 11% and household consumption by 7%. Results suggest that financial market frictions can interact in important ways and that multifaceted financial access programs might unlock dynamic household gains.

JEL-codes: G50 O13 O16 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-fdg and nep-mfd
Note: DEV
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Published as Sanghamitra Warrier Mukherjee & Lauren Falcao Bergquist & Marshall Burke & Edward Miguel, 2024. "Unlocking the benefits of credit through saving," Journal of Development Economics, .

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