Experimental microfinance data on contract structure, risk sharing and investment choice

Fischer, Greg (2017). Experimental microfinance data on contract structure, risk sharing and investment choice. [Data Collection]. Colchester, Essex: UK Data Archive. 10.5255/UKDA-SN-851466

Microfinance has been heralded as a revolutionary development tool.  But while the provision of small, uncollateralised loans to poor borrowers in poor countries may help mitigate poverty, there is little evidence that microfinance-funded businesses grow beyond subsistence entrepreneurship. Few hire employees outside their immediate families, formalise, or generate sustained capital growth. This research seeks to understand why.

To understand this phenomenon and in turn encourage growth beyond subsistence entrepreneurship, this research project addresses the following questions.
How do microfinance groups form and how does group composition affect investment choices?
Are there gender differences in response to different forms of microfinance contracts?
What is the role of local information in these contracts?
Can alternative contracts, such as microequity, encourage more efficient risk taking and hence accelerate poverty alleviation?

This project fills an important void in our understanding by approaching these questions along two front. It develops new theory that embeds the group formation and investment choice problem in an environment with both formal and informal financial contracts. It uses a series of experiments conducted with actual microfinance clients and micro-entrepreneurs in India and Bangladesh to test, extend, and refine the theory.

Data description (abstract)

Experimental data from a "lab in field" experiment with microfinance clients in Chennai, India to study the relationship between contract structure, risk sharing and investment choice. This dataset provides the replication data for the associated paper "Contract Structure, Risk-Sharing, and Investment Choice".

Data creators: