Data and Code for: Asset- Based Microfinance for Microenterprises: Evidence from Pakistan

Principal Investigator(s): View help for Principal Investigator(s) Faisal Bari, Lahore University of Management Sciences; Kashif Malik, Lahore University of Management Sciences; Muhammad Meki, University of Oxford; Simon Quinn, Imperial College London

Version: View help for Version V2

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ReducedForm			03/14/2025 11:45:AM
Structural			03/14/2025 01:27:PM
SurveyFiles			03/09/2025 11:45:AM
README_REPLICATION_V2.pdf	application/pdf	336 KB	03/14/2025 09:32:AM

Project Citation:

Bari, Faisal, Malik, Kashif, Meki, Muhammad, and Quinn, Simon. Data and Code for: Asset- Based Microfinance for Microenterprises: Evidence from Pakistan. Nashville, TN: American Economic Association [publisher], 2025. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-03-14. https://doi.org/10.3886/E195984V2

Project Description

Summary:

We run a field experiment offering graduated microcredit clients the opportunity to finance a business asset worth four times their usual borrowing limit. We implement this using a hire-purchase contract; our control group is offered a zero interest loan at the usual borrowing limit. We find large, significant, and persistent effects: treated microenterprise owners run larger businesses with higher profits; consequently, household consumption increases, particularly on food and children’s education. A dynamic structural model with nonconvex capital adjustment costs rationalizes our results and allows counterfactual analysis; this highlights the potential for welfare improvements through large capital injections that are financially sustainable.

Funding Sources: Innovations for Poverty Action (Bill and Melinda Gates Foundation) (FSI 004)

Scope of Project

Subject Terms: microfinance; randomised controlled trial

JEL Classification:
      C93 Field Experiments
      D22 Firm Behavior: Empirical Analysis
      G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      L25 Firm Performance: Size, Diversification, and Scope
      O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
      O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

Geographic Coverage: Pakistan

Data Type(s): administrative records data; survey data

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Published Versions

V2 [2025-03-14]

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