Is Micro too Small? Microcredit vs. SME Finance

Jonathan Bauchet; Jonathan Morduch

doi:10.1016/j.worlddev.2012.10.008

Is Micro too Small? Microcredit vs. SME Finance

Research output: Contribution to journal › Article › peer-review

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 language	English (US)
Pages (from-to)	288-297
Number of pages	10
Journal	World Development
Volume	43
DOIs	https://doi.org/10.1016/j.worlddev.2012.10.008
State	Published - 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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10.1016/j.worlddev.2012.10.008

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title = "Is Micro too Small? Microcredit vs. SME Finance",

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.",

keywords = "Bangladesh, Microfinance, Poverty, Small and medium enterprises, South Asia",

author = "Jonathan Bauchet and Jonathan Morduch",

note = "Funding Information: We thank CapitalPlus Exchange for providing access to the survey of small enterprises supported by BRAC Bank; we thank especially Lynn Pikholz, Clifton Kellogg, and Geetha Nagarajan. Sajjad Zohir and the Microcredit Summit Campaign contributed microcredit data collected as part of the “The Movement Above US$1 a day Threshold Project.” This work was supported by the Bill and Melinda Gates Foundation through the Financial Access Initiative at NYU. The BRAC Bank survey was funded by the Ford Foundation . The funders are not responsible for the views or content of this study. All conclusions and any errors are ours alone. ",

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doi = "10.1016/j.worlddev.2012.10.008",

language = "English (US)",

volume = "43",

pages = "288--297",

journal = "World Development",

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AU - Bauchet, Jonathan

AU - Morduch, Jonathan

N1 - Funding Information: We thank CapitalPlus Exchange for providing access to the survey of small enterprises supported by BRAC Bank; we thank especially Lynn Pikholz, Clifton Kellogg, and Geetha Nagarajan. Sajjad Zohir and the Microcredit Summit Campaign contributed microcredit data collected as part of the “The Movement Above US$1 a day Threshold Project.” This work was supported by the Bill and Melinda Gates Foundation through the Financial Access Initiative at NYU. The BRAC Bank survey was funded by the Ford Foundation . The funders are not responsible for the views or content of this study. All conclusions and any errors are ours alone.

PY - 2013/3

Y1 - 2013/3

N2 - 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.

AB - 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.

KW - Bangladesh

KW - Microfinance

KW - Poverty

KW - Small and medium enterprises

KW - South Asia

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VL - 43

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JO - World Development

JF - World Development

ER -

Is Micro too Small? Microcredit vs. SME Finance

Abstract

Keywords

ASJC Scopus subject areas

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