‘Microlending’ may not fight poverty

I saw this news article, it was an easy read and quite interesting.  So I wanted to see the actual studies the article referenced. One study was done by Abhijit Banerjee, Rachel Glennerster, Cynthia Kinnan (link to study [pdf]). The other study was done by Dean Karlan (link to study [pdf]), a professor at Yale.

You'll have to read the studies for the limitations and methodologies, but here is a summary of the conclusions.

Conclusions From the Banerjee Study:

While microcredit succeeds in affecting household expenditure and creating and expanding businesses, it appears to have no discernible effect on education, health, or womens' empowerment. Of course, after a longer time . . . these effects may emerge . . . At least in the short-term (within 15-18 months), microcredit does not appear to be a recipe for changing education, health, or womens' decision-making.

Conclusions From the Karlan Study:

Marginally creditworthy microentrepreneurs who randomly receive credit shrink their businesses relative to the control group . . . expanding access to capital (credit in our case) increases profits for male but not for female microentrepreneurs . . . [and] we find no evidence that increased access to credit improves well-being, as many microcredit advocates claim; rather, we find some evidence of a small decline in self-reported well-being.