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Commercialization and the decline of joint liability microcredit
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de Quidty, Jonathan , Fetzer, Thiemo and Ghatak, Maitreesh (2016) Commercialization and the decline of joint liability microcredit. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1119).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
Numerous authors point to a decline in joint liability microcredit, and rise in individual liability lending. But empirical evidence is lacking, and there have been no rigorous analyses of possible causes. We first show using the well-known MIX Market dataset that there is evidence for a decline. Second, we show theoretically that commercialization–an increase in competition and a shift from non-profit to for-profit lending (both of which are present in the data)–drives lenders to reduce their use of joint liability loan contracts. Third, we test the model’s key predictions, and find support for them in the data.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HG Finance | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Microfinance, Loans | ||||
Series Name: | Warwick economics research papers series (WERPS) | ||||
Publisher: | University of Warwick. Department of Economics | ||||
Place of Publication: | Coventry | ||||
ISSN: | 0083-7350 | ||||
Official Date: | March 2016 | ||||
Dates: |
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Number: | 1119 | ||||
Number of Pages: | 18 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Version or Related Resource: | This paper also appears as CAGE Discussion Paper No: 272 |
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