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Repayment Performance Under Joint Liability Borrowing. Does Social Capital Matter?: Evidence From Armenia

Author

Listed:
  • Kasarjyan, Milada
  • Fritzsch, Jana
  • Buchenrieder, Gertrud
  • Korff, Rudiger

Abstract

The aim of this paper is to test empirically the role of both cognitive and structural social capital in explaining the repayment performance of individual members under joint liability borrowing in rural Armenia. Based on unique primary data collected in 2006 in Ararat, Armavir and Vayots Dzor provinces, overall 86 observations, we estimated the Logit model to identify the determinants associated with good or bad repayment behavior of individual members. The results revealed that the members with higher level of structural and cognitive social capital as well as with higher farm productivity performed better. This indicates the importance of social as well as economic determinants for the decision and the ability of borrower's to repay the credit.

Suggested Citation

  • Kasarjyan, Milada & Fritzsch, Jana & Buchenrieder, Gertrud & Korff, Rudiger, 2007. "Repayment Performance Under Joint Liability Borrowing. Does Social Capital Matter?: Evidence From Armenia," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7796, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa104:7796
    DOI: 10.22004/ag.econ.7796
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    Cited by:

    1. Al-Azzam, Moh’d & Parmeter, Christopher F. & Sarangi, Sudipta, 2020. "On the complex relationship between different aspects of social capital and group loan repayment," Economic Modelling, Elsevier, vol. 90(C), pages 92-107.
    2. Luminita Postelnicu, 2012. "Social Capital and Repayment Performance of Group Lending in Microfinance," Working Papers CEB 12-032, ULB -- Universite Libre de Bruxelles.

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