How Does Contract Design Affect the Uptake of Microcredit among the Ultra-poor? Experimental Evidence from the River Islands of Northern Bangladesh

Kazushi Takahashi, Abu Shonchoy, Seiro Ito and Takashi Kurosaki

Journal of Development Studies, 2017, vol. 53, issue 4, 530-547

Abstract: This study examines the demand of microcredit among ultra-poor households in northern Bangladesh. We implemented a field experiment to identify what type of credit is best suited to their demand. We found that the uptake rate by the ultra-poor is the lowest for regular small cash credit, followed by in-kind credit. We also found that the ultra-poor are significantly more likely to join a microcredit programme than the moderately poor if a grace period with longer maturity is attached to a large amount of credit, irrespective of whether the credit is provided in cash or in kind.

Date: 2017
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Working Paper: How does contract design affect the uptake of microcredit among the ultra-poor?: experimental evidence from the river islands of Northern Bangladesh (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:53:y:2017:i:4:p:530-547

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DOI: 10.1080/00220388.2016.1156092

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