We present evidence from a randomized field experiment in rural Mongolia to assess the poverty impacts of a joint-liability microcredit program targeted at women. We find a positive impact of access to group loans on female entrepreneurship and household food consumption but not on total working hours or income in the household. A simultaneously introduced individual-liability microcredit program delivers no significant poverty impacts. Additional results on informal transfers to families and friends suggest that joint liability may deter borrowers from using loans for noninvestment purposes with stronger impacts as a result. We find no difference in repayment rates between both types of microcredit. (JEL G21, I32, I38, J16, L26, O15, O16)
Attanasio, Orazio, Britta Augsburg, Ralph De Haas, Emla Fitzsimons, and Heike Harmgart.
"The Impacts of Microfinance: Evidence from Joint-Liability Lending in Mongolia."
American Economic Journal: Applied Economics,
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Measurement and Analysis of Poverty
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Economics of Gender; Non-labor Discrimination
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance