Does participation in productive associations signal trust and creditworthiness ? evidence for Nicaragua
AbstractThis article studies the extent to which participation in productive associations in Nicaragua contributes to increase individuals'access to social programs and credit services. By participating in productive associations, individuals give a good signal to firms and are rewarded with better transactions and more access to the services they provide, ceteris paribus. Estimates using 2005 data indicate that households that participate in productive associations display higher access to credit and to social programs that promote investment. Additionally, participation in productive associations is weakly associated to more favorable credit outcomes among those households that receive loans, such as lower interest rates and a lower probability of wanting more credit than what was accessible to them.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4512.
Date of creation: 01 Feb 2008
Date of revision:
Access to Finance; Corporate Law; Labor Policies; Debt Markets;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-16 (All new papers)
- NEP-DEV-2008-02-16 (Development)
- NEP-MFD-2008-02-16 (Microfinance)
- NEP-SOC-2008-02-16 (Social Norms & Social Capital)
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