One Size Doesn’t Fit All: Tailored Microcredit Approaches Can Help Borrowers

In many contexts, classic microcredit models have not led to transformative impacts on income or consumption for borrowers. However, innovations such as targeting high-potential entrepreneurs, introducing flexible repayment schemes, and directly depositing loans into women’s digital accounts have often resulted in higher business assets, profits, and women’s control over capital. Tailored microcredit approaches can also help communities by raising wages and employment but may reduce informal social support networks.

This document was prepared by the J-PAL MENA Firms and Finance Team for the purpose of evidence dissemination. It is not an exhaustive review of all the rigorous evidence on this topic.