On the Impact of Microcredit: Evidence from a Randomized Intervention in Rural Ethiopia

• Authors: Alessandro Tarozzi.
• BSE Working Paper: 110225 | September 15
• Keywords: microcredit , cluster randomized controlled trial , Ethiopia
• JEL codes: O12, O16
• microcredit
• cluster randomized controlled trial
• Ethiopia

We use data from a randomized controlled trial conducted in 2003-2006 in rural Amhara and Oromiya (Ethiopia) to study the impacts of the introduction of micro finance in treated communities. We document that borrowing increased substantially in locations where the programs started their operations, but we find mixed evidence of improvements in a number of socio-economic outcomes, including income from agriculture, animal husbandry, non-farm self-employment, schooling and indicators of women’s empowerment.