The findings suggest that access to microcredit has important effects on household expenditure patterns and the creation and expansion of businesses, but no effect on health, education, women’s decision-making, or average monthly expenditure overall, at least in the short term. The effects on spending patterns in the treatment group were varied.  Households with preexisting businesses invested in durable goods, and profits from these preexisting businesses were higher than those in the control group. Households with high propensity to become business owners saw an increase in durable expenses and a decrease in nondurable expenses, including a 17 percent drop in the consumption of “temptation goods” such as alcohol, tobacco, and gambling.  This change is presumably due to financing a start-up investment, as 32 percent more new businesses were created in the treatment group than in the control group.  Households with low propensity to become business owners saw nondurable spending increase, consistent with using microcredit to pay down more expensive debt or borrow against future income. The authors found no impact on measures of health, education, or women’s decision-making, suggesting that access to microloans does not generate short-term effects on household welfare.

The authors caution that the results say little about the long-term effects of microcredit.  It is possible that impacts on education, health, or women’s empowerment would emerge after a longer time, when the investment impacts (may) have translated into higher total expenditure for more households. However, at least in the short-term, microcredit does not appear to be a recipe for changing education, health, or women’s decision-making. Microcredit therefore may not be the “miracle” that is sometimes claimed on its behalf, but it does allow households to borrow, invest, and create and expand businesses.