past variability of income. Summary statistics from the baseline survey are presented in Table 1, and variable definitions are provided in Online Appendix C.<sup>11</sup> After the completion of the survey, credit history training, and fingerprinting of the treatment group, the names and locations of the members that applied for loans along with their treatment status were handed over to MRFC loan officers so that they could screen and approve the clubs according to their protocols. Among other standard factors, MRFC conditions lending on the club’s successful completion of 16 hours of training. MRFC approved loans for 2,063 out of 3,206 customers (in 121 out of 239 clubs). Of the customers approved for loans, some failed to raise the required down payment and others opted not to borrow for other reasons. The final sample consists of 1,147 loan customers from 85 clubs.<sup>12</sup> These loan customers received loan packages with an average value of MK 16,913 (US$117).<sup>13</sup> During the months of July and August, farmers harvested the paprika crop and sold it to CP at predefined collection points. CP then transferred the proceeds from the sale to MRFC who then deducted the loan repayment and credited the remaining post-repayment proceeds to an individual farmer’s savings account. This garnishing of the proceeds for loan repayment essentially allows MRFC to “seize” the paprika crop when farmers sell to CP (and for most farmers it is the only sales outlet).<sup>14</sup> Farmers could also make loan repayments directly to MRFC at their branch locations or during credit officer visits to their villages; this occurred, for example, among the small number of farmers who sold to paprika buyers other than CP.

We also implemented a follow-up survey of farmers in August 2008, once crops had been sold and income received. The sample size of this follow-up survey is 1,226 in total (borrowers plus non-borrowers), among whom 520 were borrowers.<sup>15</sup> The formal loan maturity (payment)

> 11 These survey data were collected prior to the farmers’ being informed about the role of biometrics in the project and their treatment status, to ensure that farmers’ survey answers were not influenced by knowledge of the nature of the experiment.

> 12 While a natural question at this point is whether selection into borrowing was affected by treatment status, treatment and control groups did not differ in their rates of MRFC loan approval or the fraction of farmers who ended up with a loan (as will be detailed in the results section below).

> 13 All conversions of Malawi kwacha to US dollars in this paper assume an exchange rate of MK145/US$.

> 14 Proceeds from other types of crops of course cannot be seized in this way to secure loan repayment because MRFC does not have analogous garnishing arrangements with other crop buyers.

> 15 The follow-up sample is smaller than the sample of baseline borrowers because for budget reasons we could not visit each borrowing household at their place of residence. Instead, we invited study participants to come to a central location at a certain date and time to be administered the follow-up interview. Not all farmers attended the meeting

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