Microcredit is the provision of credit services to underserved populations. IPA's evaluations in this area aim to shed light on the underlying financial services needs of poor clients and how different financial services impact the lives of the poor. Evidence thus far suggests that microcredit, the small loans aimed at helping the poor become entrepreneurs, are not an effective poverty alleviation tool as once thought, but other products and product features, such as index insurance and commitment savings accounts, offer promising avenues for improving financial health. 

A Filipino micro entrepreneur works at his fruit stand

This is one of a handful of new studies which provide a rigorous estimate of the impact of microfinance. Accepted applicants used credit to change the structures of their business investments,...


Few studies have rigorously quantified the impact of microcredit loans.


Seven randomized evaluations from around the world show that microcredit does not have a transformative impact on poverty, but it can give low-income households more freedom in optimizing the ways...