OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
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We experimentally study the impact of substantially larger enterprise loans in Egypt. Larger loans generate small average impacts, but machine learning using psychometric data reveals that ”top-performers” (those with the highest predicted treatment effects) substantially increase profits, while profits drop for poor-performers. The large differences imply that lender credit allocation decisions matter for aggregate income, yet we find that existing practice leads to substantial misallocation. We argue that some entrepreneurs are over-optimistic and squander the opportunities presented by larger loans by taking on too much risk, and show the promise of allocations based on entrepreneurial type relative to firm characteristics.
Written with Dean Karlan (Northwestern University, IPA, J-PAL, and NBER and Adam Osman (University of Illinois at Urbana-Champaign, and J-PAL).
