Informal lending amongst friends and relatives: Can microcredit compete in rural China?
AbstractThis paper explores the relationship between informal and formal lending in China with consideration of how the strength of informal lending might affect microcredit. Lending relationships involving trust are investigated using original survey data from over 1500 farm households. Econometric results confirm a relationship between trust and informal lending, and mistrust and formal lending. With over 67% of farm households borrowing from friends and relatives the economic significance between this form of informal lending and borrowing from Rural Credit Cooperatives and Micro Finance Institutions cannot be overlooked.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 21 (2010)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/chieco
Rural credit in China Microfinance Microcredit Informal lending Chinese agriculture Agricultural finance;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guirkinger, Catherine & Boucher, Stephen R., 2004.
"Risk, Wealth And Sectoral Choice In Rural Credit Markets,"
2004 Annual meeting, August 1-4, Denver, CO
20077, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Boucher, Stephen R. & Guirkinger, Catherine, 2007. "AJAE Appendix: Risk, Wealth and Sectoral Choice in Rural Credit Markets," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 89(4), November.
- Karlan, Dean & Mobius, Markus & Rosenblat, Tanya & Szeidl, Adam, 2009.
"Trust and Social Collateral,"
Staff General Research Papers
13026, Iowa State University, Department of Economics.
- Markus Mobius & Adam Szeidl, 2007. "Trust and Social Collateral," NBER Working Papers 13126, National Bureau of Economic Research, Inc.
- Szeidl, Adam & Rosenblat, Tanya & Mobius, Markus & Karlan, Dean, 2009. "Trust and Social Collateral," Scholarly Articles 3051620, Harvard University Department of Economics.
- Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-50, September.
- Pei Guo & Xiangping Jia, 2008.
"The Structure and Reform of Rural Finance in China,"
0802, China Agricultural University, College of Economics and Management.
- Pei Guo & Xiangping Jia, 2009. "The structure and reform of rural finance in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(2), pages 212-226, May.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004.
"Cultural Biases in Economic Exchange,"
NBER Working Papers
11005, National Bureau of Economic Research, Inc.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Cultural Biases in Economic Exchange?," Economics Working Papers ECO2007/42, European University Institute.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2005. "Cultural Biases in Economic Exchange," 2005 Meeting Papers 234, Society for Economic Dynamics.
- Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2005. "Cultural Biases in Economic Exchange," CEPR Discussion Papers 4837, C.E.P.R. Discussion Papers.
- Park, Albert & Ren, Changqing, 2001. "Microfinance with Chinese Characteristics," World Development, Elsevier, vol. 29(1), pages 39-62, January.
- Richard L. Meyer & Geetha Nagarajan, 2006. "Microfinance in developing countries: accomplishments, debates, and future directions," Agricultural Finance Review, Emerald Group Publishing, vol. 66(2), pages 167-193, September.
- Stephen R. Boucher & Michael R. Carter & Catherine Guirkinger, 2008. "Risk Rationing and Wealth Effects in Credit Markets: Theory and Implications for Agricultural Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 409-423.
- Manfred Zeller, 2006. "A comparative review of major types of rural microfinance institutions in developing countries," Agricultural Finance Review, Emerald Group Publishing, vol. 66(2), pages 195-213, September.
- Tsai, Kellee S., 2004. "Imperfect Substitutes: The Local Political Economy of Informal Finance and Microfinance in Rural China and India," World Development, Elsevier, vol. 32(9), pages 1487-1507, September.
- Minggao Shen & Jikun Huang & Linxiu Zhang & Scott Rozelle, 2010. "Financial reform and transition in China: a study of the evolution of banks in rural China," Agricultural Finance Review, Emerald Group Publishing, vol. 70(3), pages 305-332, November.
- Valentina M. Hartarska & Martin Holtmann, 2006. "An overview of recent developments in the microfinance literature," Agricultural Finance Review, Emerald Group Publishing, vol. 66(2), pages 147-165, September.
- Steve Boucher & Catherine Guirkinger, 2007. "Risk, Wealth, and Sectoral Choice in Rural Credit Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 991-1004.
- Standifird, Stephen S. & Marshall, R. Scott, 2000. "The transaction cost advantage of guanxi-based business practices," Journal of World Business, Elsevier, vol. 35(1), pages 21-42, April.
- Xie, Ping, 2003. "Reforms of China's rural credit cooperatives and policy options," China Economic Review, Elsevier, vol. 14(4), pages 434-442.
- Turvey, Calum G. & Kong, Rong, 2008. "Vulnerability, Trust and Microcredit: The Case of China?s Rural Poor," Working Paper Series RP2008/52, World Institute for Development Economic Research (UNU-WIDER).
- Jing You & Samuel Annim, 2013. "The impact of microcredit on child education: quasi-experimental evidence from rural China," Brooks World Poverty Institute Working Paper Series 18313, BWPI, The University of Manchester.
- Zhang, Heather Xiaoquan & Loubere, Nicholas, 2013. "Rural finance, development and livelihoods in China," Duisburger Arbeitspapiere Ostasienwissenschaften 94/2013, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
- Alexander Karaivanov & Anke Kessler, 2013. "A Friend in Need is a Friend Indeed: Theory and Evidence on the (Dis)Advantages of Informal Loans," Discussion Papers dp13-03, Department of Economics, Simon Fraser University, revised Apr 2013.
- Turvey, Calum G. & He, Guangwen & MA, Jiujie & Kong, Rong & Meagher, Patrick, 2012. "Farm credit and credit demand elasticities in Shaanxi and Gansu," China Economic Review, Elsevier, vol. 23(4), pages 1020-1035.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.