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Applying Behavioral Economics to microcredit in China’s rural areas

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  • Oliphant, Wesley
  • Ma, Hong

Abstract

To improve the provision of microcredit to farmers, this paper describes and suggests which cognitive biases in Behavioral Economics may apply to and should be tested on borrowers (farmers) and lenders (workers at Rural Credit Cooperatives) in China’s rural market for microcredit. For example, some of the biases considered are loss aversion, ambiguity aversion and the sequential bias. If biases are found, this paper also suggests what would help mitigate the biases’ negative effects. This paper is the first to apply Behavioral Economics to the lenders in China’s rural credit market.

Suggested Citation

  • Oliphant, Wesley & Ma, Hong, 2021. "Applying Behavioral Economics to microcredit in China’s rural areas," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    • Handle: RePEc:eee:beexfi:v:31:y:2021:i:c:s221463502100099x
    DOI: 10.1016/j.jbef.2021.100555
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    Cited by:

    1. Shuangming Yin & Xiaojuan Chen & Xiangyu Zhou & Chao Chen & Jianxu Liu, 2023. "Effect of Micro-Credit for Poverty Alleviation on Income Growth and Poverty Alleviation—Empirical Evidence from Rural Areas in Hebei, China," Agriculture, MDPI, vol. 13(5), pages 1-17, May.

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