ABSTRACT
In this chapter, we focus on microcredit – the provision of small loans at affordable interest rates to individuals who cannot access mainstream lenders due to a lack of collateral and/or credit history. We first introduce microcredit, discussing the innovations that led to its rapid worldwide development – targeting women borrowers and innovative contract design – and outline debates around its provision and impact. We then turn to the relationship between microcredit (itself) and health. We outline theory on mechanisms through which microcredit might impact health outcomes and present evidence from low-, middle- and high-income countries with respect to such relationships.
