Relationship Lending in Microcredit: Evidence from Bangladesh
We use primary data compiled from the field in 34 randomly selected villages in Bangladesh to examine the role of bank-borrower relationships in the application and approval stages of microcredit. We find evidence that potential borrowers who have maintained membership for a long time, and who have non-mandatory saving accounts and a successful track record of previous loans are more likely to apply, and be approved, for individual as well as group loans. Having a relationship with multiple lenders increases the probability of applying for a loan but reduces the probability of being approved for it. We also provide evidence that it is the large (rather than small) microfinance institutions who rely more on relationship metrics.
|Date of creation:||Mar 2010|
|Contact details of provider:|| Postal: 812 West State Street, West Lafayette, IN 47906|
Fax: (765) 494-0869
Web page: http://www.cfs.purdue.edu/csr/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Demirguc-Kunt, Asli & Love, Inessa & Maksimovic, Vojislav, 2006.
"Business environment and the incorporation decision,"
Journal of Banking & Finance,
Elsevier, vol. 30(11), pages 2967-2993, November.
- Demirguc-Kunt, Asli & Love, Inessa & Maksimovic, Vojislav, 2004. "Business Environment and the Incorporation Decision," Policy Research Working Paper Series 3317, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:csr:wpaper:1005. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sugato Chakravarty)
If references are entirely missing, you can add them using this form.