{"componentChunkName":"component---src-templates-post-query-tsx","path":"/research/does-the-classic-microfinance-model-discourage-entrepreneurship-among-the-poor-experimental-evidence-from-india/","result":{"pageContext":{"post":{"slug":"/research/does-the-classic-microfinance-model-discourage-entrepreneurship-among-the-poor-experimental-evidence-from-india/","title":"Does the Classic Microfinance Model Discourage Entrepreneurship Among the Poor? Experimental Evidence from India","date":"Oct 01, 2013","timeToRead":1,"description":"Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. ","body":"function _extends() { _extends = Object.assign || function (target) { for (var i = 1; i < arguments.length; i++) { var source = arguments[i]; for (var key in source) { if (Object.prototype.hasOwnProperty.call(source, key)) { target[key] = source[key]; } } } return target; }; return _extends.apply(this, arguments); }\n\nfunction _objectWithoutProperties(source, excluded) { if (source == null) return {}; var target = _objectWithoutPropertiesLoose(source, excluded); var key, i; if (Object.getOwnPropertySymbols) { var sourceSymbolKeys = Object.getOwnPropertySymbols(source); for (i = 0; i < sourceSymbolKeys.length; i++) { key = sourceSymbolKeys[i]; if (excluded.indexOf(key) >= 0) continue; if (!Object.prototype.propertyIsEnumerable.call(source, key)) continue; target[key] = source[key]; } } return target; }\n\nfunction _objectWithoutPropertiesLoose(source, excluded) { if (source == null) return {}; var target = {}; var sourceKeys = Object.keys(source); var key, i; for (i = 0; i < sourceKeys.length; i++) { key = sourceKeys[i]; if (excluded.indexOf(key) >= 0) continue; target[key] = source[key]; } return target; }\n\n/* @jsxRuntime classic */\n\n/* @jsx mdx */\nvar _frontmatter = {\n  \"title\": \"Does the Classic Microfinance Model Discourage Entrepreneurship Among the Poor? Experimental Evidence from India\",\n  \"date\": \"2013-10-01\",\n  \"template\": \"post\",\n  \"slug\": \"does-the-classic-microfinance-model-discourage-entrepreneurship-among-the-poor-experimental-evidence-from-india\",\n  \"postedLink\": \"https://riceinstitute.org/research/does-the-classic-microfinance-model-discourage-entrepreneurship-among-the-poor-experimental-evidence-from-india/\",\n  \"description\": \"Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. \",\n  \"tags\": \"Research\",\n  \"banner\": \"\"\n};\nvar layoutProps = {\n  _frontmatter: _frontmatter\n};\nvar MDXLayout = \"wrapper\";\nreturn function MDXContent(_ref) {\n  var components = _ref.components,\n      props = _objectWithoutProperties(_ref, [\"components\"]);\n\n  return mdx(MDXLayout, _extends({}, layoutProps, props, {\n    components: components,\n    mdxType: \"MDXLayout\"\n  }), mdx(\"p\", null, \"Authors: Erica Field, Rohini Pande, John Papp, Natalia Rigol\"), mdx(\"p\", null, \"Published in: \", mdx(\"em\", {\n    parentName: \"p\"\n  }, \"American Economic Review\")), mdx(\"p\", null, mdx(\"a\", {\n    parentName: \"p\",\n    \"href\": \"https://github.com/riceinstitute/content/blob/release/research/field-et-al-2013-does-the-classic-microfinance-model-discourage-entrepreneurship-among-the-poor-experimental-evidence-from-india.pdf\",\n    \"target\": \"_blank\",\n    \"rel\": \"noopener noreferrer\"\n  }, \"Download Paper\")), mdx(\"p\", null, \"Abstract:\"), mdx(\"p\", null, \"Do the repayment requirements of the classic microfinance contract\\xA0inhibit investment in high-return but illiquid business opportunities\\xA0among the poor? Using a field experiment, we compare the\\xA0classic contract which requires that repayment begin immediately\\xA0after loan disbursement to a contract that includes a two-month\\xA0grace period. \"), mdx(\"p\", null, \"The provision of a grace period increased short-run\\xA0business investment and long-run profits but also default rates.\\xA0The results, thus, indicate that debt contracts that require early repayment\\xA0discourage illiquid risky investment and thereby limit the\\xA0potential impact of microfinance on microenterprise growth and\\xA0household poverty.\"));\n}\n;\nMDXContent.isMDXComponent = true;","tags":[{"name":"Research","slug":"research"}],"banner":null}}},"staticQueryHashes":["318001574","3787687951","3787687951"]}