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Can Self-Help Groups Really Be "Self-Help"?

Brian P. Greaney, Joseph Kaboski and Eva Van Leemput ()

The Review of Economic Studies, 2016, vol. 83, issue 4, 1614-1644

Abstract: We provide an experimental and theoretical evaluation of a cost-reducing innovation in the delivery of "self-help group" microfinance services, in which privatized agents earn payments through membership fees for providing services. Under the status quo, agents are paid by an outside donor and offer members free services. In our multi-country randomized control trial, we evaluate the change in this incentive scheme on agent behaviour and performance, and on overall village-level outcomes. We find that privatized agents start groups, attract members, mobilize savings, and intermediate loans at similar levels after a year but at much lower costs to the NGO. At the village level, we find higher levels of borrowing, business-related savings, and investment in business. Examining mechanisms, we find that self-help groups serve more business-oriented clientele when facilitated by agents who face strong financial incentives.

Date: 2016
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Citations: View citations in EconPapers (22)

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Working Paper: Can Self-Help Groups Really Be 'Self-Help'? (2016) Downloads
Working Paper: Can self-help groups really be self-help? (2013) Downloads
Working Paper: Can Self-Help Groups Really Be "Self-Help"? (2013) Downloads
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The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

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