The Impact of Microcredit in Bangladesh: Revisiting the Evidence

CGD research fellow David Roodman and Jonathan Morduch reexamine three landmark studies of the impact of microcredit on poor households in Bangladesh. They show that all three fail to rule out reverse causation. For example, a positive association between microcredit use and household spending may merely indicate that less-poor families borrow more. Bottom line: evidence that microcredit reduces poverty is even scarcer than previously understood.

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