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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

shoe vendor

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 microcredit products was modest. People often used funds for consumption rather than entrepreneurial investments, suggesting that there were high non-entrepreneurial returns to credit. Innovations... Read More
A small business owner in Colombia.

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. Read More

Additional Insights

People holding goats by leashes

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. Read More

Sector Chairs

Headshot of Dean Karlan

Dean Karlan


Sector Contacts

Samantha Carter

Senior Policy Associate

[email protected]
(617) 324-7691

Mikaela Rabb

Policy Associate

[email protected]
(617) 258-6021