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The Evolution of A Microcredit Institution: The Irish Loan Funds, 1720 - 1920

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  • Aidan Hollis
  • Arthur Sweetman

Abstract

We introduce the Irish loan funds, a set of independent but regulated microcredit societies, which in the mid-nineteenth century were lending to 20% of Irish households. Their institutional evolution is traced from the eighteenth to the twentieth centuries. This system was remarkably successful at transferring capital to the "industrious poor" on a large scale over a long period. We argue that its structure conferred many advantages on the funds, enabling them to mitigate informational problems and allowing sufficient flexibility for the institution to survive even the Great Famine. Empirical analysis confirms their sensitivity to external economic factors and their role in promoting diversification.

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  • Aidan Hollis & Arthur Sweetman, 1996. "The Evolution of A Microcredit Institution: The Irish Loan Funds, 1720 - 1920," Working Papers ecpap-96-01, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:ecpap-96-01
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    References listed on IDEAS

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    1. Besley, Timothy & Coate, Stephen & Loury, Glenn, 1993. "The Economics of Rotating Savings and Credit Associations," American Economic Review, American Economic Association, vol. 83(4), pages 792-810, September.
    2. Christopher Udry, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 495-526.
    3. Rosenthal, Jean-Laurent, 1994. "Rural Credit Markets and Aggregate Shocks: The Experience of Nuits St. Georges, 1756–1776," The Journal of Economic History, Cambridge University Press, vol. 54(02), pages 288-306, June.
    4. Adams, Dale W & Von Pischke, J. D., 1992. "Microenterprise credit programs: Deja vu," World Development, Elsevier, vol. 20(10), pages 1463-1470, October.
    5. Abhijit V. Banerjee & Timothy Besley & Timothy W. Guinnane, 1994. "Thy Neighbor's Keeper: The Design of a Credit Cooperative with Theory and a Test," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 491-515.
    6. Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, World Bank Group, vol. 4(3), pages 351-366, September.
    7. North, Douglass C., 1984. "Government and the Cost of Exchange in History," The Journal of Economic History, Cambridge University Press, vol. 44(02), pages 255-264, June.
    8. Hoff, Karla, 2008. "Joseph E. Stiglitz," Policy Research Working Paper Series 4478, The World Bank.
    9. Aruna Srinivasan, 1994. "Intervention in credit markets and development lending," Economic Review, Federal Reserve Bank of Atlanta, issue May, pages 13-27.
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    1. repec:cpn:umkeip:v:16:y:2017:i:3:p:275-285 is not listed on IDEAS

    More about this item

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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