Learning By Association: Micro Credit In Chiapas, Mexico
Micro credit programs provide institutional arrangements for low-income people to transit from nonmarket to market-oriented settings. This article develops a data set of payment records to determine micro credit participants' behavior on repayment performance. The findings shed new light strongly supporting micro credit as a feasible alternative to successfully provide financial resources to the poor, when controlling for asymmetric information. The empirical evidence indicates that learning by association through peer mentoring is a significant determinant in explaining high repayment rates, whereas peer monitoring is not. (JEL "O1", "O17", "L31", "J15") Copyright 2006 Western Economic Association International.
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Volume (Year): 24 (2006)
Issue (Month): 2 (04)
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