Policy Insights in Finance

J-PAL’s Finance sector seeks to understand how access to financial services can reduce poverty and spur economic development by helping households smooth consumption, make investments, and manage risk. Our policy insights below summarize general lessons from randomized evaluations on increasing access to capital through microcredit and spurring self-employment through a multi-faceted approach for the extreme poor.

Dean Karlan (Northwestern University), Finance Chair

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Reducing the costs of saving

Last updated: July 2020
High costs associated with formal bank accounts are often cited as a key obstacle for low-income households to save in formal financial institutions, but lowering the cost of savings does not consistently increase savings flows, likely due to a multitude of other barriers. Given the positive welfare...

Reducing the cost of lending to low-income borrowers

Last updated: April 2018
Product and market innovations that generate more information about borrowers, reduce transaction costs, and encourage repayment all address factors that contribute to the high cost of microcredit in low- and middle-income countries.

Microcredit: impacts and limitations

Last updated: April 2018
Evidence from randomized evaluations in low- and middle-income countries shows that giving small loans in the form of microcredit did not lead to transformative impacts on income or long-term consumption on average, but it did help households better manage financial choices. Demand for many of the...

Building stable livelihoods for the ultra-poor

Last updated: September 2015
A multifaceted livelihood program that provided ultra-poor households in seven low- and middle-income countries with a productive asset, training, regular coaching, access to savings, and consumption support led to large and lasting impacts on their standard of living.

Additional Insights

Using cash transfers to improve child health in low- and middle-income countries

Last updated: May 2020
Cash transfer programs conditional on the use of health products and services generally increase uptake and improve child health outcomes among households that receive them. Cash transfers that increase uptake of healthy behaviors in the short term can improve cognition and educational outcomes in...

Sector Chairs

Headshot of Dean Karlan

Chair, Finance

Member, Executive Committee

Frederic Esser Nemmers Distinguished Professor of Economics and Finance

Northwestern University

Sector Contacts

Senior Policy Associate, J-PAL Global

Headshot of Emily Romano

Policy Manager, J-PAL Global