Microfinance in Theory and Practice: Field Experiments

Principal Investigators: Dean S. Karlan , Princeton University; Pieter le Roux, University of the Western Cape, South Africa; Jonathan Zinman, Dartmouth College

Publications & Outputs   |   Project Proposal

Problem & Objective
This project will use field experiments to try to answer three key questions related to microcredit markets: How responsive are borrowing and repayment to interest rates? What are the impacts of access of consumer credit on borrowers? and What are the impacts of access to credit on microentrepreneurs?

Research Context
This project will test fundamental questions related to microcredit markets, using a combination of field experiment methodologies and supplementary data collection. This approach will allow researchers to shed new light on open questions related to micro-development, contract theory, banking, finance, behavioral economics, psychology and public health.

Policy Implications
Results for policymakers will bear directly on critical issues facing designers of lending programs. They will attempt to assess whether access to capital helps poor borrowers accumulate assets and working capital. They will also try to inform decisions on interest rate policies and the potential role for the private sector.

Publications and Outputs

BASIS Briefs   |   Other Publications   |    Trip Reports

• Teaching Entrepreneurship: Experiments to Improve Microfinance, by Dean Karlan and Jonathan Zinman, with Martin Valdivia. May 2006. 4 pages. (BASIS Brief no. 47)
  [Adobe Acrobat PDF 44K]

• Elasticities of Demand for Consumer Credit, by Dean Karlan and Jonathan Zinman. October 2005. 45 pages.
• What's Psychology Worth? A Field Experiment in the Consumer Credit Market, by Marianne Bertrand, Dean Karlan, Sendhil Mullainatha,. Eldar Shafir and Jonathan Zinman. July 2005. 60 pages.
• Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment, by Dean Karlan and Jonathan Zinman. June 2005. 58 pages.