Tag Archives: jonathan zinman

Study of microcredit finds generally positive, but not transformative, impacts

Microcredit generally benefits borrowers, according to new research focused on Mexico’s biggest for-profit microlender — but it’s not lifting people out of poverty.

In a multi-year, randomized evaluation of microloans provided by Compartamos Banco, Yale University economist Dean Karlan, with collaborators Manuela Angelucci of the University of Michigan and Jonathan Zinman of Dartmouth College, show there are generally positive effects on average and find little evidence that some borrowers end up worse off while others end up better off. However, the canonical story that microcredit leads to higher enterprise income did not bear fruit. (more…)

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The Downside — and Surprising Upside — of Microcredit

Microcredit, which involves giving small loans to very small businesses in an effort to promote entrepreneurship, has been widely touted as a way to reduce poverty and stimulate economic growth. A multitude of both non- and for-profit institutions are spending billions of dollars each year on microcredit ventures in developing nations around the globe.

But just how effective is microcredit lending? In a new study, researchers find that the practice may not be an efficient tool in promoting business growth or improving the lives of its beneficiaries, but could instead have just the opposite effect. However, they discovered other surprising advantages. (more…)

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