Relief from Usury : Impact of a Community-Based Microcredit Program in Rural India

Hoffmann, Vivian ; Rao, Vijayendra ; Surendra, Vaishnavi ; Datta, Upamanyu

World Bank, Washington, DC

关键词: MICROFINANCE;    MICROCREDIT;    USURY;    SELF-HELP GROUPS;    RURAL CREDIT MARKETS;   

DOI  :  10.1596/1813-9450-8021
RP-ID  :  WPS8021

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The impact of micro-credit interventionson existing credit markets is theoretically ambiguous.Previous empirical work suggests the entry of ajoint-liability lender may lead to a positive impact on theinformal lending rate. This paper presents the firstrandomized controlled trial–based evidence on this question.Households in rural Bihar, India, were offered low-costcredit through a government-led self-help group program, therollout of which was randomized at the panchayat level. Theintervention led to a dramatic 14.5 percent decline in theuse of informal credit, as households substituted tolower-cost self-help group loans. Due to the program, theaverage rate paid on recent loans fell from 69 to 58 percentper year overall. Rates on informal loans also declinedslightly. Among landless households, informal lending ratesfell from 65.5 to 63.2 percent, decreasing by 40 percent thegap in rates paid by landless versus landowning households.Two years after the initiation of the program, significantpositive impacts on asset ownership among landlesshouseholds were apparent. Impacts on various indicators ofwomen's empowerment were mixed, and showed no cleardirection when aggregated, nor was there any impact onconsumption expenditures.