Cotler, Pablo and Woodruff, Christopher M.. (2008) The impact of short‐term credit on microenterprises : evidence from the Fincomun‐Bimbo program in Mexico. Economic Development and Cultural Change, Vol.56 (No.4). pp. 829-849. ISSN 0013-0079

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Abstract

The lack of credit is often mentioned as one of the major constraints facing small businesses. We use differences in the phasing in of a new lending program designed to serve clients of the largest snack food company in Mexico to identify the impact of credit on outcomes of small retail enterprise in Mexico City. We find that the loans have positive impacts on the smallest firms but negative impacts on larger firms. These results are consistent with hypotheses that smaller firms have higher returns to capital and face greater credit constraints. Given that the program involved loans given for 4‐month terms, we find surprisingly large effects on investment in fixed assets.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory J Political Science > JL Political institutions (America except United States)
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	Economic Development and Cultural Change
Publisher:	University of Chicago Press
ISSN:	0013-0079
Date:	July 2008
Volume:	Vol.56
Number:	No.4
Number of Pages:	21
Page Range:	pp. 829-849
Identification Number:	10.1086/588169
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Funder:	Ford Foundations, University of California Institute for Mexico and the United States (UC MEXUS)
URI:	http://wrap.warwick.ac.uk/id/eprint/45565

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