Evaluation of Impacts of Access to Credit and Loan Size for Microcredit Clients in South Africa

Summary

This study involves randomization of individuals who were initially rejected from a micro-lending organization in South Africa. Subjects were placed into two arms: (1) not receiving a loan; (2) being reconsidered for a "second look." Of those in the second arm, 53% were then selected by the organization's loan officers to receive a standard loan for first-time borrowers. Mental health and financial data were collected at one timepoint: approximately 6-12 months after the subjects first applied for the loan.

Conditions

• Mental Health
• Depression
• Stress

Interventions

OTHER

Small loan

Applicants in the treatment group were offered an interest rate, loan size, and maturity per the lender's standard underwriting criteria, involving a 4-month maturity at 11.75% per month, charged on the original balance (200% annual percentage rate).

Sponsors & Collaborators

• Broadening Access and Strengthening Input Market Systems/USAID

  collaborator UNKNOWN

• U.S. National Science Foundation

  collaborator FED

• Bill and Melinda Gates Foundation

  collaborator OTHER

• Princeton University

  collaborator OTHER

• Social Science Research Council Program in Applied Economics

  collaborator UNKNOWN

• Federal Reserve Bank of New York

  collaborator UNKNOWN

• Innovations for Poverty Action

  lead OTHER

Principal Investigators

• Dean Karlan, PhD · Innovations for Poverty Action

• Jonathan Zinman, PhD · Dartmouth University

• Lia Fernald, PhD · University of California, Berkeley

Study Design

Allocation

RANDOMIZED

Masking

SINGLE

Model

PARALLEL

Eligibility

Min Age

18 Years

Sex

ALL

Healthy Volunteers

No

Timeline & Regulatory

Start

2004-09-30

Primary Completion

2005-11-30

Completion

2005-11-30

Countries

• South Africa

Study Locations