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Determinants of Borrowing and Households’ Risk of Credit in Rural Area in Niger

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  • Ahamadou MAICHANOU

Abstract

This article focuses on borrowers default in rural credit in Niger, according to their food needs situation. Given that economic agents are likely to adopt opportunistic behavior rather than mutually beneficial relations when facing natural hazards, this analysis is taken from the perspective of contract theory with asymmetric information. In the case of rural Niger, it empirically addresses the determinants of involuntary default, voluntary default and repayment effort, while managing the difficulties of applying the concepts of information economy and uncertainty to the complexity of rural area credit in a developing country. Results show more involuntary default than voluntary one and a real willing to repay. These results make us to provide support for households with effort repayment willing and establish an incentives structure for all kind of borrowers.

Suggested Citation

  • Ahamadou MAICHANOU, 2016. "Determinants of Borrowing and Households’ Risk of Credit in Rural Area in Niger," Cahiers du GREThA (2007-2019) 2016-06, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
  • Handle: RePEc:grt:wpegrt:2016-06
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2016/2016-06.pdf
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    References listed on IDEAS

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    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, April.
    2. Dionne, Georges, 1987. "Incertain et information : où en sommes-nous trente-cinq ans après le Colloque de Paris?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 63(2), pages 5-39, juin et s.
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    4. Isabelle Guérin & Marc Roesch & Ophélie Héliès & Govindan Venkatasubramanian, 2009. "Microfinance, Endettement Et Surendettement. Une Étude De Cas En Inde Du Sud," Revue Tiers-Monde, Armand Colin, vol. 0(1), pages 131-146.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    6. Stiglitz, Joseph E, 1989. "Markets, Market Failures, and Development," American Economic Review, American Economic Association, vol. 79(2), pages 197-203, May.
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    More about this item

    Keywords

    ontract; credit; risk of default; asymmetry of information; rural; Niger;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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