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Can Micro-Credit Support Public Health Subsidy Programs?

Augsburg, Britta and Caeyers, Bet and Malde, Bansi (2019) Can Micro-Credit Support Public Health Subsidy Programs? Working paper. IFS Working Paper Series 10.1920/wp.ifs.2019.1019. (Unpublished) (doi:10.1920/wp.ifs.2019.1019) (KAR id:78661)

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The low take-up of cost-effective and highly subsidised preventive health technologies in low-income countries remains a puzzle. One under-studied reason is that the design of subsidy schemes is such that households remain financially constrained. In this paper we analyse whether, and how, micro-finance supports a large public health subsidy program in the developing world - the Swachh Bharat Mission - in achieving its aim of increasing uptake of individual household latrines. Exploiting a cluster randomised controlled experiment of a sanitation micro-finance program that coincided with the launch of the SBM program, and unique survey data matched to administrative data, we find that the complementarity runs on two levels: First, micro-credit allows households officially ineligible for the subsidy to invest in sanitation by alleviating credit constraints. Second, micro-credit also helps subsidy eligible households to overcome short-term liquidity constraints induced by the remuneration-post-verification subsidy design to invest in sanitation. Subsidy eligible households living in areas experiencing large delays in subsidy disbursement, or high toilet costs, are more likely to take a sanitation loan, but less likely to use the loan to construct a toilet.

Item Type: Monograph (Working paper)
DOI/Identification number: 10.1920/wp.ifs.2019.1019
Uncontrolled keywords: sanitation; subsidies; microcredit; India
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Bansi Malde
Date Deposited: 13 Nov 2019 16:00 UTC
Last Modified: 09 Dec 2022 08:16 UTC
Resource URI: (The current URI for this page, for reference purposes)
Malde, Bansi:
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