Cynthia Kinnan examines the long-term impacts of microcredit access using a randomized trial in Hyderabad, India. Contrary to a recent wave of pessimism regarding microcredit impacts, we find large, sustained impacts for a group we call "gung-ho entrepreneurs." Another group, "reluctant entrepreneurs," experience no impacts of microcredit access. These findings have implications for the optimal lending policies of microlenders, and for other policies aimed at promoting entrepreneurship and relieving credit constraints for poor households.
Cynthia Kinnan's research focuses on how households in developing countries use financial products and informal insurance networks to finance investments, save, and cope with risk. She is also an affiliate of the National Bureau of Economic Research, the Jameel Poverty Action Lab, the Bureau for Research and Economic Analysis of Development, and Northwestern's Institute for Policy Research.
This is part of the Buffett Institute Faculty & Fellows Colloquium.