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Discrimination by Microcredit Officers:Theory and Evidence on Disability in Uganda

  • Pierre-Guillaume Méon
  • Roy Mersland
  • Ariane Szafarz
  • Marc Labie

This paper studies the relationship between a microfinance institution (MFI) and its credit officers when the latter discriminate against a group of the target population. Using survey data from Uganda, we provide evidence that credit officers are more biased against disabled borrowers than other employees. In line with the evidence, we then build an agency model of a non-profit MFI and a discriminating credit officer. Since incentive schemes are costly and the MFI’s budget is limited, even a non-discriminating welfare-maximizing MFI may prefer paying smaller incentivizing compensation, and letting its credit officer discriminate to some extent.

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File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/87194/1/11-06Discrimination_by_Microcredit_Officers_May%202011.pdf
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Paper provided by ULB -- Universite Libre de Bruxelles in its series DULBEA Working Papers with number 11-06.

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Length: 35 p.
Date of creation: 18 May 2011
Date of revision:
Publication status: Published by:
Handle: RePEc:dul:wpaper:2013/87194
Contact details of provider: Web page: http://difusion.ulb.ac.be
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