Good Intentions Pave the Way to ... the Local Moneylender
AbstractMicroborrowers may take usurious loans to repay a loan taken from a micro nance institution because of having neglected the time inconsistency of optimal plans or having discounted future payoffs too strongly from the ex-post perspective. Microfinance programs should strive at preventing such consequences of bounded rationality.
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Bibliographic InfoPaper provided by Bavarian Graduate Program in Economics (BGPE) in its series Working Papers with number 126.
Length: 9 pages
Date of creation: Sep 2012
Date of revision:
microfinance; hyperbolic discounting;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
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