The Diffusion of Microfinance

Abhijit Banerjee, Arun G. Chandrasekhar, Esther Duflo, Matthew O. Jackson


To study the impact of the choice of injection points in the diffusion of a new product in society, this study examined the impact of a word-of-mouth diffusion model and applied it to data on social networks and participation in a newly available microfinance loan program in 43 Indian villages. This article presents findings from the model, which allows us to distinguish information passing among neighbors from direct influence of neighbors’ participation decisions, as well as information passing by participants versus non-participants.


Journal Article

Thematic Area

Financial Well-being and Social Protection