Relief from usury: Impact of a community-based microcredit program in rural India

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cg.authorship.typesCGIAR single centreen
cg.contributor.donorWorld Banken
cg.contributor.donorUK Aiden
cg.contributor.donorEuropean Unionen
cg.contributor.donorInternational Initiative for Impact Evaluationen
cg.contributor.donorDepartment of Foreign Affairs and Trade, Australiaen
cg.contributor.donorDepartment for International Development, United Kingdomen
cg.coverage.countryIndia
cg.coverage.iso3166-alpha2IN
cg.coverage.regionSouthern Asia
cg.coverage.regionAsia
cg.creator.identifierVivian Hoffmann: 0000-0002-6464-3748
cg.identifier.projectIFPRI - Markets, Trade, and Institutions Division
cg.identifier.publicationRankNot ranked
cg.number8021en
cg.placeWashington, DCen
cg.reviewStatusInternal Reviewen
dc.contributor.authorHoffmann, Vivianen
dc.contributor.authorRao, Vijayendraen
dc.contributor.authorSurendra, Vaishnavien
dc.contributor.authorDatta, Upamanyuen
dc.date.accessioned2024-06-21T09:24:03Zen
dc.date.available2024-06-21T09:24:03Zen
dc.identifier.urihttps://hdl.handle.net/10568/148210
dc.titleRelief from usury: Impact of a community-based microcredit program in rural Indiaen
dcterms.abstractThe impact of micro-credit interventions on existing credit markets is theoretically ambiguous. Previous empirical work suggests the entry of a joint-liability lender may lead to a positive impact on the informal lending rate. This paper presents the first randomized controlled trial–based evidence on this question. Households in rural Bihar, India, were offered low-cost credit through a government-led self-help group program, the rollout of which was randomized at the panchayat level. The intervention led to a dramatic 14.5 percent decline in the use of informal credit, as households substituted to lower-cost self-help group loans. Due to the program, the average rate paid on recent loans fell from 69 to 58 percent per year overall. Rates on informal loans also declined slightly. Among landless households, informal lending rates fell from 65.5 to 63.2 percent, decreasing by 40 percent the gap in rates paid by landless versus landowning households. Two years after the initiation of the program, significant positive impacts on asset ownership among landless households were apparent. Impacts on various indicators of women’s empowerment were mixed, and showed no clear direction when aggregated, nor was there any impact on consumption expenditures.en
dcterms.bibliographicCitationHoffmann, Vivian; Rao, Vijayendra; Surendra, Vaishnavi; and Datta, Upamanyu. 2017. Relief from usury: Impact of a community-based microcredit program in rural India. Policy Research Working Paper 8021. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/619581491240135589/pdf/WPS8021.pdfen
dcterms.extent37 pagesen
dcterms.isPartOfPolicy Research Working Paperen
dcterms.issued2017
dcterms.languageen
dcterms.publisherWorld Banken
dcterms.replaceshttps://ebrary.ifpri.org/digital/collection/p15738coll5/id/6144en
dcterms.subjectrural communitiesen
dcterms.subjectinterest ratesen
dcterms.subjectmicrocrediten
dcterms.subjecteconomic developmenten
dcterms.subjectrural financeen
dcterms.subjectself-help groupsen
dcterms.subjectpovertyen
dcterms.subjectcrediten
dcterms.subjectmonetary policiesen
dcterms.typeWorking Paper

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