Where Credit is Due

Starting in the early 2000s, researchers began to conduct randomized evaluations to contribute rigorous evidence to this debate. These randomized evaluations have assessed some of the most pressing and important questions about microcredit: What is the impact of access to microcredit on financial behavior, business activity, and household welfare? Do borrowers’ investments translate into increased income? Does access to microcredit help empower women or increase household investments in education or health? The randomized evaluations in this document 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.