Does the Classic Microfinance Model Discourage Entrepreneurship among the Poor? Experimental Evidence from India.

Does the Classic Microfinance Model Discourage Entrepreneurship among the Poor? Experimental Evidence from India. Rohini Pande, October 2013, Paper. "Do the repayment requirements of the classic microfinance contract inhibit investment in high-return but illiquid business opportunities among the poor? Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. The provision of a grace period increased short-run business investment and long-run profits but also default rates..." Link verified June 19, 2014