EPISODE ONE

Standard microcredit contracts seem to have modest effects on the performance of small firms and no effects on household consumption. Could we construct a better designed product to improve on the standard contract? This project explores why alternative contracts do matter. Researchers explore the effect of offering larger financial products with the option of flexible repayment to previous microfinance borrowers who have been successful and have demonstrated they are able to repay their loans. This project is run in partnership between the Centre for the Study of African Economies, Lahore University of Management Sciences, Innovations for Poverty Action, and the research initiative Private Enterprise Development in Low-Income Countries.

Project location: Pakistan        Read the transcript      Published 06 December 2021