Evidence in Labor Market Policies and Implications for Brazil: Microcredit

This publication, co-authored by JOI Brazil, a J-PAL LAC initiative, and the Inter-American Development Bank analyzes the available evidence on microcredit programs and discusses their implications for public policy formulation in Brazil. Microcredit programs can be a tool to help entrepreneurs overcome financial constraints by providing access to small loans aimed at fostering growth and alleviating poverty through increased income-generating opportunities. However, despite the global popularity of these programs, evaluations in middle- and low-income countries indicate that the provision of microcredit has not always led to significant impacts on the income and consumption of their beneficiaries, nor has it consistently promoted high-return investments. Given this, it is essential to identify the most relevant characteristics of successful programs.