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Are Women “The role of lender-entrepreneur relationships on the availability of entrepreneurial microfinance for the poor"

Author

Listed:
  • Sugato Chakravarty

    (Purdue University)

  • Abu Zafar Shahriar

    (Purdue University)

  • Abu Zafar M. Shahriar

    (Monash University)

Abstract

We examine the role of lender-entrepreneur relationships on the lending decision of microfinance institutions. Using primary data from Bangladesh, we show that the likelihood of being approved for microcredit increases in the magnitude of relationship driven information, and decreases in the lack of precision of such information. We further show that large microfinance institutions rely more on relationship metrics, as opposed to their smaller counterparts, because they are better able to produce precise information based on lending relationships. We discuss the implications of relationship-based lending for the survival and success of small enterprises and, their financiers, in low-income countries.

Suggested Citation

  • Sugato Chakravarty & Abu Zafar Shahriar & Abu Zafar M. Shahriar, 2014. "Are Women “The role of lender-entrepreneur relationships on the availability of entrepreneurial microfinance for the poor"," Working Papers 1020, Purdue University, Department of Consumer Sciences.
    • Handle: RePEc:csr:wpaper:1020
    as

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