Advanced Search
MyIDEAS: Login to save this paper or follow this series

Contingent Loan Repayment in the Philippines

Contents:

Author Info

  • Gubert, Flore
  • Fafchamps, Marcel

Abstract

Using data from the Philippines, this article seeks to understand how households in the study area apparently manage to avoid falling into a debt trap in spite of frequent borrowing. Findings suggest that this is achieved via three institutional features. First, most informal debt carries no interest. Second, for all debts, repayment is postponed in case of a borrower’s difficulty; this is the only insurance feature of debt repayment. Third, while debt principal is seldom forgiven or reduced, interest‐bearing debt does not carry additional interest if debt repayment is delayed. This prevents interest charges from accumulating and debt from snowballing.

Download Info

If 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.
File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/4568/1/2002-14.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/4568.

as in new window
Length:
Date of creation: Jul 2007
Date of revision:
Publication status: Published in Economic Development and Cultural Change, 2007, Vol. 55, no. 4. pp. 633-667.Length: 34 pages
Handle: RePEc:dau:papers:123456789/4568

Contact details of provider:
Web page: http://www.dauphine.fr/en/welcome.html
More information through EDIRC

Related research

Keywords: Dette; Crédit;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Fafchamps, Marcel, 1996. "The enforcement of commercial contracts in Ghana," World Development, Elsevier, Elsevier, vol. 24(3), pages 427-448, March.
  2. Eaton, Jonathan & Gersovitz, Mark & Stiglitz, Joseph E., 1986. "The pure theory of country risk," European Economic Review, Elsevier, Elsevier, vol. 30(3), pages 481-513, June.
    • Jonathan Eaton & Mark Gersovitz & Joseph E. Stiglitz, 1991. "The Pure Theory of Country Risk," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 391-435 National Bureau of Economic Research, Inc.
  3. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 1998. "Mutual Insurance, Individual Savings and Limited Commitment," Keele Department of Economics Discussion Papers (1995-2001), Department of Economics, Keele University 98/14, Department of Economics, Keele University.
  4. Marcel Fafchamps & Susan Lund, 2000. "Risk-Sharing Networks in Rural Philippines," Economics Series Working Papers 10, University of Oxford, Department of Economics.
  5. Gubert, Flore & Fafchamps, Marcel, 2007. "The Formation of Risk Sharing Networks," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/4392, Paris Dauphine University.
  6. Bulow, Jeremy & Rogoff, Kenneth S., 1989. "A Constant Recontracting Model of Sovereign Debt," Scholarly Articles 12491028, Harvard University Department of Economics.
  7. Jeremy I. Bulow & Kenneth Rogoff, 1988. "Sovereign Debt: Is To Forgive To Forget?," NBER Working Papers 2623, National Bureau of Economic Research, Inc.
  8. Platteau, Jean-Philippe, 1995. "An Indian Model of Aristocratic Patronage," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 636-62, October.
  9. Andrew D. Foster & Mark R. Rosenzweig, 2001. "Imperfect Commitment, Altruism, And The Family: Evidence From Transfer Behavior In Low-Income Rural Areas," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 389-407, August.
  10. Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers, Harvard - Institute for International Development 512, Harvard - Institute for International Development.
  11. Eaton, Jonathan & Gersovitz, Mark, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 48(2), pages 289-309, April.
  12. Udry, C., 1991. "A Competitive Analysis of Rural Credit : State-Contingent Loans in Northern Nigeria," Papers, Yale - Economic Growth Center 630, Yale - Economic Growth Center.
  13. Narayana Kocherlakota, 2010. "Implications of Efficient Risk Sharing Without Commitment," Levine's Working Paper Archive 2053, David K. Levine.
  14. Marcel Fafchamps, . "Sovereign Debt, Structural Adjustment and Conditionality," Working Papers, Stanford University, Department of Economics 96015, Stanford University, Department of Economics.
  15. Kochar, Anjini, 1997. "An empirical investigation of rationing constraints in rural credit markets in India," Journal of Development Economics, Elsevier, Elsevier, vol. 53(2), pages 339-371, August.
  16. Kletzer, Kenneth M, 1984. "Asymmetries of Information and LDC Borrowing with Sovereign Risk," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 94(374), pages 287-307, June.
  17. Dean M. Maki, 2000. "The growth of consumer credit and the household debt service burden," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2000-12, Board of Governors of the Federal Reserve System (U.S.).
  18. Herschel I. Grossman & John B. Van Huyck, 1985. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," NBER Working Papers 1673, National Bureau of Economic Research, Inc.
  19. Platteau, J.P., 1996. "Traditional Sharing Norms as an Obstacle to Economic Growth in Tribal Societies," Papers, Notre-Dame de la Paix, Sciences Economiques et Sociales 173, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  20. Platteau, Jean-Philippe, 1995. "A framework for the analysis of evolving patron-client ties in agrarian economies," World Development, Elsevier, Elsevier, vol. 23(5), pages 767-786, May.
  21. MICHAEL R. CARTER & Frederic Zimmerman, 1998. "The Dynamic Cost and Persistence of Asset Inequality in an Agrarian Economy," Wisconsin-Madison Agricultural and Applied Economics Staff Papers, Wisconsin-Madison Agricultural and Applied Economics Department 416, Wisconsin-Madison Agricultural and Applied Economics Department.
  22. Kimball, Miles S, 1988. "Farmers' Cooperatives as Behavior Toward Risk," American Economic Review, American Economic Association, American Economic Association, vol. 78(1), pages 224-32, March.
  23. Genicot, Garance, 2002. "Bonded labor and serfdom: a paradox of voluntary choice," Journal of Development Economics, Elsevier, Elsevier, vol. 67(1), pages 101-127, February.
  24. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center, Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  25. Kletzer, K.M. & Wright, B.D., 1990. "Sovereign Debt Renegotiation In A Consumption-Smoothing Model," Papers, Yale - Economic Growth Center 610, Yale - Economic Growth Center.
  26. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, Elsevier, vol. 40(1), pages 1-24, February.
  27. Rosenzweig, Mark R, 1988. "Risk, Private Information, and the Family," American Economic Review, American Economic Association, American Economic Association, vol. 78(2), pages 245-50, May.
  28. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-82, July.
  29. Townsend, Robert M, 1995. "Financial Systems in Northern Thai Villages," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 1011-46, November.
  30. Mace, Barbara J, 1991. "Full Insurance in the Presence of Aggregate Uncertainty," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(5), pages 928-56, October.
  31. Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(5), pages 957-76, October.
  32. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  33. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 38(1), pages 1-25, January.
  34. Udry, Christopher, 1990. "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy," World Bank Economic Review, World Bank Group, World Bank Group, vol. 4(3), pages 251-69, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Gubert, Flore & Fafchamps, Marcel, 2007. "The Formation of Risk Sharing Networks," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/4392, Paris Dauphine University.
  2. Landmann, Andreas & Vollan, Björn & Frölich, Markus, 2011. "Saving, Microinsurance: Why You Should Do Both or Nothing. A Behavioral Experiment on the Philippines," Proceedings of the German Development Economics Conference, Berlin 2011 51, Verein für Socialpolitik, Research Committee Development Economics.
  3. Marie Godquin & Manohar Sharma, 2005. "If only I could borrow more ! Production and consumption credit constraints in the Philippines," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00193374, HAL.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:dau:papers:123456789/4568. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandre Faure).

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.