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Microfinance at the margin: experimental evidence from Bosnia and Herzegovina

[working paper]

Augsburg, Britta; De Haas, Ralph; Harmgart, Heike; Meghir, Costas

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Please use the following Persistent Identifier (PID) to cite this document:http://hdl.handle.net/10419/93061

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Corporate Editor Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We use a randomised controlled trial (RCT) to analyse the impact of microcredit on poverty reduction in Bosnia and Herzegovina. The study population are loan applicants that would normally have just been rejected based on regular screening. We find that access to credit allowed borrowers to start and expand small-scale businesses. Households that already had a business and where the borrower had more education, ran down their savings, presumably to complement the loan and to achieve the minimum amount necessary to expand their business. In less-educated households, however, consumption went down. A key new result is that there was a substantial increase in the labour supply of young adults (16-19 year olds). This was accompanied by a reduction in school attendance. (author's abstract)
Keywords microfinance; human capital; liquidity; credit; combating poverty; level of education; school attendance; available workers; setting up a business; Bosnia and Herzegovina
Classification Economic Policy; Social Problems
Document language English
Publication Year 2014
City Berlin
Page/Pages 40 p.
Series Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Ökonomik des Wandels, SP II 2014-304
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications