| Full text | |
| Author(s): |
Bettoni, Luis
;
Santos, Marcelo
;
Filho, Gilberto Oliveira
Total Authors: 3
|
| Document type: | Journal article |
| Source: | JOURNAL OF POLICY MODELING; v. 45, n. 3, p. 17-pg., 2023-05-01. |
| Abstract | |
Over the past decades, microfinance has become a pillar of economic development policies. However, despite the great popularity of micro-credit programs, the results of empirical studies are mixed. Thus, more research is needed to help us understand how effective microfinance is in achieving poverty reduction, economic development, and financial inclusion. This paper contributes to the literature by relying on a unique dataset from one of the biggest Fintech companies in Brazil to study the impact of microcredit on small firms' outcomes. Using a difference-in-difference approach, we find that access to credit increases monthly revenues and profits by nearly 4.5%. We show that the effects are stronger for women-led businesses and less experienced entrepreneurs. In addition, we find that credit renewal strengthens the benefits of credit access. We discuss several policy implications from our results. In particular, the permanent availability of credit - as opposed to one-time/ short-term interventions - has greater potential to generate virtuous cycles of ever more reinvestment and growth, indicating larger gains from relaxing borrowing constraints in the long run. & COPY; 2023 Published by Elsevier Inc. on behalf of The Society for Policy Modeling. (AU) | |
| FAPESP's process: | 17/18943-0 - Optimal fiscal policy in business cycle economies with incomplete markets |
| Grantee: | Luís Gustavo Bettoni |
| Support Opportunities: | Scholarships in Brazil - Doctorate (Direct) |