Can Microcredits improve the access to others financial services?

This paper evaluates the effects that microcredits have on expanding the access to other financial instruments. We investigated if the provision of additional microcredits works as a gateway to other banking products from different categories and banking channels, meanwhile keeping in mind that the provision of microcredits allows for an increase in customers’ knowledge and trust in banks, reduces uncertainty, and encourages existing customers to try different product categories. We exploited the fact that, in order to pre-approve credits and offer them to microentrepreneurs, the bank calculates a score and, furthermore, if this score is above the cut-off point (700 points), then the credit is pre-approved. The cut-off at 700 points makes a Fuzzy Regression Discontinuity approach available. Estimates of microcredits’ effects on the access to new banking products are positive and significantly different from zero. In contrast, microcredits did not show a significant effect on the intensity of bank card usage and online banking.