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Do Microcredit Loans Do What They Are Intended To Do? A Case Study of the Credit Village Microcredit Programme in China

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  • Meishan Jiang
  • Krishna P. Paudel
  • Fan Zou

Abstract

The purpose of this study is to assess if the credit village is an effective way to develop a microcredit programme in China from the perspective of poverty reduction policy and risk monitoring. Cross‐sectional household survey data from three credit villages in the Yunan County of China are analysed using 3SLS and IV probit models. The major finding is that the credit village loosens credit restrictions to some extent. However, it has no impact on educational expenditures, medical expenditures, long‐term assets, short‐term assets and women's rights. It is our observation that the microcredit programme in China needs more innovation to become effective. © 2020 John Wiley & Sons, Ltd.

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  • Meishan Jiang & Krishna P. Paudel & Fan Zou, 2020. "Do Microcredit Loans Do What They Are Intended To Do? A Case Study of the Credit Village Microcredit Programme in China," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(5), pages 763-792, July.
    • Handle: RePEc:wly:jintdv:v:32:y:2020:i:5:p:763-792
    DOI: 10.1002/jid.3477
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    2. Yunhui Wang & Yihua Chen & Zhiying Li, 2024. "Escaping poverty: changing characteristics of China’s rural poverty reduction policy and future trends," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    3. Meishan Jiang & Krishna P. Paudel & Seydina O. Sene, 2022. "Does counter‐guarantee affect microcredit mechanism's performance on repayment? Evidence from Guangzhou, China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1807-1817, April.
    4. Habimana, Dominique & Haughton, Jonathan, 2022. "Does Rwanda’s flagship microcredit programme boost agriculture and incomes?," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 17(3), September.
    5. Omotuyole Isiaka Ambali & Toritseju Begho, 2021. "Examining the relationship between farmers' perceived trust and investment preferences," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(8), pages 1290-1303, November.

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