Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary A brief description of the project's goals and its current state Abstract <p>Can improved access to credit jump-start microenterprise growth? We examine subjects in urban Hyderabad, India, six years after microfinance–an intervention commonly believed to lower the cost of credit and spark business creation–was randomly introduced to a subset of neighborhoods. We find large benefits both in business scale and performance from giving “gung-ho entrepreneurs” (GEs)–those who started a business before microfinance entered–more access to microfinance. Notably, these effects persist two years after microfinance was withdrawn from Hyderabad. However, any persistent benefits to “reluctant entrepreneurs” (REs), those without prior businesses, are much more meager and generally indistinguishable from zero. A model of technology choice in which REs can only access a diminishing-returns technology, while GEs can also access a technology with high fixed costs but high returns, can generate dynamics matching those observed in the data. These results suggest that heterogeneity in entrepreneurial ability is important and persistent; and that lenders entering a new market may be better off by focusing on borrowers at the intensive rather than extensive margin. We also provide some of the first evidence on the relationship between formal and informal credit from an individual’s social network. While microfinance crowds out informal finance for the novices, the informal financial relationships of seasoned entrepreneurs exhibit complementarities with access to formal credit.</p> The full abstract of the study, if available Links https://papers.ssrn.com/sol3/papers.cfm Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Sample Trial population and sample selection Number of treatment groups Size of treatment groups Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Rounds of data collection Baseline data collection and method Data collection method and data collected Evaluation Outcome variables Results Intervention costs Cost benefit ratio Reference Banerjee, Abhijit V. and Breza, Emily and Duflo, Esther and Kinnan, Cynthia, Do Credit Constraints Limit Entrepreneurship? Heterogeneity in the Returns to Microfinance (September 1, 2017). Buffett Institute Global Poverty Research Lab Working Paper No. 17-104. Citation for use in academic references
