@article{72,
  author = {Rohini Pande and John Papp and Erica Field and Natalia Rigol},
  title = {Does the Classic Microfinance Model Discourage Entrepreneurship Among the Poor? Experimental Evidence from India},
  abstract = {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 prots but also default rates. The results, thus, indicate that debt contracts that require early re-payment discourage illiquid risky investment and thereby limit the potential impact of microfinance on micro enterprise growth and household poverty.},
  year = {2013},
  journal = {American Economic Review},
  volume = {October 2013 103 },
  pages = {2196-2226},
}