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Market structure and borrower welfare in microfinance
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De Quidt, Jonathan, Fetzer, Thiemo and Ghatak, Maitreesh (2013) Market structure and borrower welfare in microfinance. Working Paper. Coventry, UK: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2013 (Number 123).
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Text (Working paper )
WRAP_ 123.2013_ghatak.pdf - Published Version Download (1393Kb) | Preview |
Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
Motivated by recent controversies surrounding the role of commercial lenders
in microfinance, we analyze borrower welfare under different market structures,
considering a benevolent non-profit lender, a for-profit monopolist, and
a competitive credit market. To understand the magnitude of the effects analyzed,
we simulate the model with parameters estimated from the MIX Market
database. Our results suggest that market power can have severe implications
for borrower welfare, while despite possible information frictions competition
typically delivers similar borrower welfare to non-profit lending. In addition,
for-profit lenders are less likely to use joint liability than non-profits.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Commercial loans , Infrastructure (Economics), Microfinance | ||||
Series Name: | CAGE Online Working Paper Series | ||||
Publisher: | Department of Economics, University of Warwick | ||||
Place of Publication: | Coventry, UK | ||||
Official Date: | 2013 | ||||
Dates: |
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Volume: | Volume 2013 | ||||
Number: | Number 123 | ||||
Number of Pages: | 15 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 1 August 2016 | ||||
Date of first compliant Open Access: | 1 August 2016 | ||||
Funder: | Economic and Social Research Council (Great Britain) (ESRC), London School of Economics and Political Science (LSE), University of Warwick, Konrad-Adenauer-Stiftung, Suntory and Toyota International Centres for Economics and Related Disciplines |
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