Michael Callen, Suresh De Mel, Craig McIntosh, Christopher Woodruff, 03 February 2015

Recent findings in development economics indicate that microloans are likely to perform best when accompanied by financial education, insurance, and savings products. This column presents evidence from a natural experiment in Sri Lanka, which involved door-to-door collection services among rural households. The evidence suggests that the programme increased both savings and income. In order to build up savings in the initial period, participants increased the hours worked. The treatment also triggered exit from self-employment. Financial service innovation can, therefore, have a major effect on the incentives to exit poverty.

Christopher Woodruff, 27 January 2012

Christopher Woodruff talks to Viv Davies about his recent research in Sri Lanka that looks at the constraints to growth of micro-enterprises and how to generate job creation; he highlights the effects of wage subsidies, savings programmes, entrepreneurship training, firm registration and the transition from small informal firms to more dynamic enterprises. They also discuss a new 5-year competitive research grants programme, directed by Woodruff and co-ordinated by CEPR, that focuses on private enterprise development in low-income countries.

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