Is Micro too Small? Microcredit vs. SME Finance

Jonathan Bauchet, Jonathan Morduch

Research output: Contribution to journalArticle

Abstract

Microcredit and small and medium enterprise (SME) finance are often pitched as alternative strategies to create employment opportunities in low-income communities. So far, though, little is known about how employment patterns compare. We integrate evidence from three surveys to show that, compared to Bangladeshi microcredit customers, typical SME employees in Bangladesh have more education and professional skills, and live in households that are notably less poor. SME jobs also require long work weeks, clashing with family responsibilities. The evidence from Bangladesh rejects the idea that SME finance more efficiently creates jobs for the population currently served by microcredit.

Original languageEnglish (US)
Pages (from-to)288-297
Number of pages10
JournalWorld Development
Volume43
DOIs
StatePublished - Mar 2013

Keywords

  • Bangladesh
  • Microfinance
  • Poverty
  • Small and medium enterprises
  • South Asia

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development
  • Sociology and Political Science
  • Economics and Econometrics

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