Evidence from Mali indicates that farmers with higher marginal returns to investment are more likely to self-select into lending programs

We partnered with a micro‐lender in Mali to randomize credit offers at the village level. Then,
in no‐loan control villages, we gave cash grants to randomly selected households. These grants
led to higher agricultural investments and profits, thus showing that liquidity constraints bind
with respect to agricultural investment. In loan‐villages, we gave grants to a random subset of
farmers who (endogenously) did not borrow. These farmers have lower – in fact zero –
marginal returns to the grants. Thus we find important heterogeneity in returns to investment
and strong evidence that farmers with higher marginal returns to investment self‐select into
lending programs.

By Lori Beaman, Dean Karlan, Bram Thuysbaert, and Christopher Udry (2014)