Abstract
This randomized evaluation measures the impact of a microcredit program introduced in rural areas of Morocco starting in 2006 by Al Amana, the country’s largest microfinance institution. The study takes advantage of Al Amana's expansion into rural areas with no previous microcredit penetration, before the introduction of the product and for the duration of the study. We designed a sampling strategy that allows us to estimate the impact on borrowers, and also to capture impacts representative at the village level. Within the catchment areas of newly-opened branches, 81 pairs of matched villages were included in the study. The treatment villages, randomly selected within each pair, received access to Al Amana loans immediately, while villages in the control group were only offered microcredit two years later. Following Al Amana's timeline of branch openings between 2006 and 2007, a baseline survey grouped in four waves was administered to collect data on socio-economic characteristics, household production, members’ outside work, consumption, credit and women’s role in the household. A follow-up survey conducted two years later found that, among the thirteen percent of households in treatment villages who took a loan, microcredit had large, albeit heterogeneous, impacts on assets and profits from self-employment activities, but that any potential gains in consumption were offset by a reduction in income from casual labor. A third round of data collection is currently underway to measure whether, now that a much longer time period has elapsed, the investment in business assets paid off in the longer run.