A Dynamic Model Of Microlending In The Developing Countries
In this paper, we examine the contract design problem of banks that extend loans to poor borrowers and seek to maximize outreach while remaining financially sustainable. A dynamic model is developed that shows how interest rates can be determined based on information about productivity and diligence characteristics of borrowers, investment opportunities, correlation of business activities, peer monitoring costs, and social sanctions. The results indicate that relative to the traditional static models, the dynamic model explains better the current experience in individual and group lending in developing countries.
|Date of creation:||2001|
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- Navajas, Sergio & Schreiner, Mark & Meyer, Richard L. & Gonzalez-vega, Claudio & Rodriguez-meza, Jorge, 2000.
"Microcredit and the Poorest of the Poor: Theory and Evidence from Bolivia,"
Elsevier, vol. 28(2), pages 333-346, February.
- Navajas, Sergio & Schreiner, Mark & Meyer, Richard L. & Gonzalez-Vega, Claudio & Rodriguez-Meza, Jorge, 1998. "Microcredit And The Poorest Of The Poor: Theory And Evidence From Bolivia," Economics and Sociology Occasional Papers 28334, Ohio State University, Department of Agricultural, Environmental and Development Economics.
- Sergio Navajas & Jonathan Conning & Claudio Gonzalez-Vega, 2003.
"Lending technologies, competition and consolidation in the market for microfinance in Bolivia,"
Journal of International Development,
John Wiley & Sons, Ltd., vol. 15(6), pages 747-770.
- Jonathan Conning & Sergio Navajas & Claudio Gonzalez-Vega, 2003. "Lending Technologies, Competition, and Consolidation in the Market for Microfinance in Bolivia," Economics Working Paper Archive at Hunter College 213, Hunter College Department of Economics.
- Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
- Chaves, Rodrigo A. & Gonzalez-Vega, Claudio, 1996. "The design of successful rural financial intermediaries: Evidence from Indonesia," World Development, Elsevier, vol. 24(1), pages 65-78, January.
- Conning, Jonathan, 1999. "Outreach, sustainability and leverage in monitored and peer-monitored lending," Journal of Development Economics, Elsevier, vol. 60(1), pages 51-77, October.
- Ghatak, Maitreesh & Guinnane, Timothy W., 1999.
"The economics of lending with joint liability: theory and practice,"
Journal of Development Economics,
Elsevier, vol. 60(1), pages 195-228, October.
- Maitreesh Ghatak & Timothy W. Guinnane, 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Discussion Papers 98-16, University of Copenhagen. Department of Economics.
- Maitreesh Ghatak & Timothy W. Guinnane, 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Working Papers 791, Economic Growth Center, Yale University.
- Ghatak, M. & Guinnane, T.W., 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Papers 791, Yale - Economic Growth Center.
- Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, vol. 60(1), pages 27-50, October.
- Van Tassel, Eric, 1999. "Group lending under asymmetric information," Journal of Development Economics, Elsevier, vol. 60(1), pages 3-25, October.
- Armendariz de Aghion, Beatriz, 1999. "On the design of a credit agreement with peer monitoring," Journal of Development Economics, Elsevier, vol. 60(1), pages 79-104, October.
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