Publication:
Relief from Usury: Impact of a Community-Based Microcredit Program in Rural India

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dc.contributor.authorHoffmann, Vivian
dc.contributor.authorRao, Vijayendra
dc.contributor.authorSurendra, Vaishnavi
dc.contributor.authorDatta, Upamanyu
dc.date.accessioned2017-04-13T20:01:12Z
dc.date.available2017-04-13T20:01:12Z
dc.date.issued2017-04
dc.description.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
dc.identifierhttp://documents.worldbank.org/curated/en/619581491240135589/Relief-from-usury-impact-of-a-community-based-microcredit-program-in-rural-India
dc.identifier.doi10.1596/1813-9450-8021
dc.identifier.urihttps://hdl.handle.net/10986/26366
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8021
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectMICROFINANCE
dc.subjectMICROCREDIT
dc.subjectUSURY
dc.subjectSELF-HELP GROUPS
dc.subjectRURAL CREDIT MARKETS
dc.subjectCOMMUNITY-BASED PROGRAM
dc.subjectEMPOWERMENT
dc.titleRelief from Usuryen
dc.title.subtitleImpact of a Community-Based Microcredit Program in Rural Indiaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleRelief from Usury: Impact of a Community-Based Microcredit Program in Rural India
okr.date.disclosure2017-04-03
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/619581491240135589/Relief-from-usury-impact-of-a-community-based-microcredit-program-in-rural-India
okr.guid619581491240135589
okr.identifier.doi10.1596/1813-9450-8021
okr.identifier.externaldocumentum090224b084a79342_1_0
okr.identifier.internaldocumentum27325192
okr.identifier.reportWPS8021
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/619581491240135589/pdf/WPS8021.pdfen
okr.region.administrativeSouth Asia
okr.region.countryIndia
okr.statistics.combined3500
okr.statistics.dr619581491240135589
okr.statistics.drstats2951
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicFinance and Financial Sector Development::Microfinance
okr.topicFinance and Financial Sector Development::Non Bank Financial Institutions
okr.topicFinance and Financial Sector Development::Rural Finance
okr.topicGender::Gender and Economics
okr.topicSocial Development::Community Development and Empowerment
okr.unitPoverty and Inequality Team, Development Research Group
relation.isAuthorOfPublication385fa299-94e8-5dcc-a817-90cf574a0ae2
relation.isAuthorOfPublication.latestForDiscovery385fa299-94e8-5dcc-a817-90cf574a0ae2
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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