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Interlinked Marketing and Credit Arrangements: Some Recent Evidence from Rural Philippines

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  • Teh, Robert Jr.

Abstract

The formal credit market has rationed out small-scale farmers due to asymmetry of information. Hence, interlinking of markets is observed. In this arrangement, traders become lenders to farmers due to informational advantages acquired through the years of transactions with each other. This research reports the two-phase survey results in the provinces of Bohol and Iloilo. In particular, this comprehensively describes the trader-farmer interlinked arrangements to determine the duration of the loans, the identity of the lenders, the form of payments, the methods of screening borrowers and the controls implemented to prevent moral hazard.

Suggested Citation

  • Teh, Robert Jr., 1994. "Interlinked Marketing and Credit Arrangements: Some Recent Evidence from Rural Philippines," Discussion Papers DP 1994-23, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_1994-23
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    File URL: https://www.pids.gov.ph/publication/discussion-papers/interlinked-marketing-and-credit-arrangements-some-recent-evidence-from-rural-philippines
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    References listed on IDEAS

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    1. Braverman, Avishay & Stiglitz, Joseph E, 1982. "Sharecropping and the Interlinking of Agrarian Markets," American Economic Review, American Economic Association, vol. 72(4), pages 695-715, September.
    2. Braverman, Avishay & Guasch, J. Luis, 1984. "Capital requirements, screening and interlinked sharecropping and credit contracts," Journal of Development Economics, Elsevier, vol. 14(3), pages 359-374, April.
    3. Fabella, Raul V., 1992. "Price uncertainty and trader-farmer linkage," Journal of Public Economics, Elsevier, vol. 47(3), pages 391-399, April.
    4. Kotwal, Ashok, 1985. "The role of consumption credit in agricultural tenancy," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 273-295, August.
    5. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
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    Cited by:

    1. Fuentes, Gabriel A., 1998. "Middlemen and agents in the procurement of paddy: Institutional arrangements from the rural Philippines," Journal of Asian Economics, Elsevier, vol. 9(2), pages 307-331.

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