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

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

This paper studies the relationship between a microfinance institution and its credit officers when the latter are biased against a subgroup of the clientele. 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 discriminatory credit officer. Since incentives are costly, and the MFI’s budget is limited, even a non discriminating welfare-maximizing MFI may prefer paying smaller incentives, and letting its credit officer discriminate to some extent.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 10-007.RS.

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Length: 29 p.
Date of creation: 2010
Date of revision:
Publication status: Published by:
Handle: RePEc:sol:wpaper:10-007
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