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What is Microfinance about?

The document summarizes a field experiment conducted in India that tested the impact of relaxing liquidity demands in microfinance loans. The experiment found: 1) Borrowers given a two-month grace period before repayment invested more in their businesses, were more likely to start new businesses, and achieved higher long-term profits compared to those under standard immediate repayment contracts. 2) However, grace period borrowers also defaulted at higher rates in the short-run due to taking on riskier b

Author

Basit Ali

Language

EN