Evaluating the Social and Economic Impact of Microcredit on Individual Borrowers & Their Communities in Mexico

Last registered on July 26, 2016
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Pre-Trial

Trial Information

General Information

Title
Evaluating the Social and Economic Impact of Microcredit on Individual Borrowers & Their Communities in Mexico
RCT ID
AEARCTR-0000325
Initial registration date
July 26, 2016

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 26, 2016, 3:03 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Mexico
Region
Latin America

Primary Investigator

Name
Dean Karlan
Affiliation
Northwestern University
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Jonathan Zinman
PI Affiliation
Dartmouth College
Contact Investigator
PI Name
Manuela Angelucci
PI Affiliation
University of Michigan
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2009-03-01
End date
2015-01-01
Keywords
Finance & Microfinance
Additional Keywords
Gender, microcredit
JEL code(s)
C83, D14, G21, I31, J23, O12, O16
Secondary IDs
Abstract
We use a clustered randomized trial, and over 16,000 household surveys, to estimate impacts at the community level from a group lending expansion at 110 percent APR by the largest micro lender in Mexico. We find no evidence of transformative impacts on 37 outcomes (although some estimates have large confidence intervals), measured at a mean of 27 months post-expansion, across 6 domains: micro entrepreneurship, income, labor supply, expenditures, social status, and subjective well-being. We also examine distributional impacts using quantile regressions, given theory and evidence regarding negative impacts from borrowing at high interest rates, but do not find strong evidence for heterogeneity.
External Link(s)
JPAL evaluation summary

Registration Citation

Citation
Angelucci, Manuela, Dean Karlan and Jonathan Zinman. 2016. "Evaluating the Social and Economic Impact of Microcredit on Individual Borrowers & Their Communities in Mexico." AEA RCT Registry. July 26. https://doi.org/10.1257/rct.325-1.0
Former Citation
Angelucci, Manuela, Dean Karlan and Jonathan Zinman. 2016. "Evaluating the Social and Economic Impact of Microcredit on Individual Borrowers & Their Communities in Mexico." AEA RCT Registry. July 26. https://www.socialscienceregistry.org/trials/325/history/9732
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
We worked with Compartamos to randomize its rollout into north-central Sonora (near the Arizona border), an area it had not previously lent in. Specifically, we randomized credit access and loan promotion across 238 geographic “clusters” (neighborhoods in urban areas, towns or contiguous towns in rural areas). Treatment clusters received access to credit and door-to-door loan promotion, whereas control clusters were not given access to credit and received no loan promotion.
Intervention Start Date
2009-04-01
Intervention End Date
2012-04-01

Primary Outcomes

Primary Outcomes (end points)
Loan take-up and financial access, Business activities, Household finances and well-being.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
71 percent of Compartamos clients borrowed through Crédito Mujer, the joint liability microloan product studied in this paper. Crédito Mujer nominally targets women who have a business or self-employment activity or intend to start one. Empirically, we estimate that only about 51 percent of borrowers are “microentrepreneurs.” Crédito Mujer loan amounts during most of the study range from 1,500– 27,000 pesos (12 pesos = US$1), with amounts for first-time borrowers ranging from 1,500–6,000 pesos (US$125–US$500) and larger amounts subsequently available to members of groups that have successfully repaid prior loans.
Experimental Design Details
Randomization Method
randomization done in office by a computer
Randomization Unit
Geographic area
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
238 geographic “clusters” (neighborhoods in urban areas, towns or contiguous towns in rural areas).
Sample size: planned number of observations
16,560 women
Sample size (or number of clusters) by treatment arms
Region 1: (endline-only): Caborca, Agua Prieta, and urban area of Nogales
Treatment: 104
Control: 101

Region 2 (panel sample): outlying areas of Nogales
Treatment: 16
Control: 17
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action Human Subjects Committee
IRB Approval Date
2008-06-01
IRB Approval Number
IRB #061.08June-008
IRB Name
Yale University Human Subjects Committee
IRB Approval Date
2008-06-01
IRB Approval Number
IRB #0808004114
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
April 01, 2012, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
April 01, 2012, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
We attempted to track at endline 2,912 households out of the full baseline sample of 6,786 households. We identified 63% of this group, which comprises 1,823 households and yields an attrition rate of 37%.
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
Yes
Public Data URL
http://www.aeaweb.org/aej/app/data/0701/2013-0537_data.zip

Program Files

Program Files
Yes
Program Files URL
http://www.aeaweb.org/aej/app/data/0701/2013-0537_data.zip
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
Author Disclosure Statement(s)
Citation
Angelucci, Manuela, Dean Karlan and Jonathan Zinman. 2015. "Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco." American Economic Journal: Applied Economics, 7(1): 151-82.
URL
https://www.aeaweb.org/aej/app/ds/0701/2013-0537_ds.zip
Abstract
We use a clustered randomized trial, and over 16,000 household surveys, to estimate impacts at the community level from a group lending expansion at 110 percent APR by the largest micro lender in Mexico. We find no evidence of transformative impacts on 37 outcomes (although some estimates have large confidence intervals), measured at a mean of 27 months post-expansion, across 6 domains: micro entrepreneurship, income, labor supply, expenditures, social status, and subjective well-being. We also examine distributional impacts using quantile regressions, given theory and evidence regarding negative impacts from borrowing at high interest rates, but do not find strong evidence for heterogeneity.
Citation
Angelucci, Manuela, Dean Karlan, and Jonathan Zinman. 2015. "Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco." American Economic Journal: Applied Economics 7(1): 151-182.
URL
https://www.povertyactionlab.org/sites/default/files/publications/182_61%20Angelucci%20et%20al%20Mexico%20Jan2015.pdf
Abstract
Online Appendix
Citation
Angelucci, Manuela, Dean Karlan and Jonathan Zinman. 2015. "Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco." American Economic Journal: Applied Economics, 7(1): 151-82.
URL
https://assets.aeaweb.org/assets/production/articles-attachments/aej/app/app/0701/2013-0537_app.pdf
Abstract
JPAL Bulletin: Seven randomized evaluations from around the world show that microcredit does not have a transformative
impact on poverty, but it can give low-income households more freedom in optimizing the ways they make money,
consume, and invest.
Citation
J-PAL and IPA Policy Bulletin. 2015. “Where Credit is Due.” Cambridge, MA: Abdul Latif Jameel Poverty Action Lab and Innovations for Poverty Action.
URL
https://www.povertyactionlab.org/sites/default/files/publications/where-credit-is-due.pdf

Reports & Other Materials