Click here for search results
Liability structure in small-scale finance : evidence from a natural experimen, Volume 1
Author:Carpena, Fenella; Cole, Shawn; Shapiro, Jeremy; Zia, Bilal; Country:World;
Date Stored:2010/09/20Document Date:2010/09/01
Document Type:Policy Research Working PaperSubTopics:Debt Markets; Bankruptcy and Resolution of Financial Distress; Access to Finance; Microfinance; Deposit Insurance
Language:EnglishMajor Sector:(Historic)Health and other social services
Rel. Proj ID:1W-Finance Literacy & Investment Choice As A Means To Female Empow -- -- P111634;Region:The World Region
Report Number:WPS5427Sub Sectors:Other social services
Collection Title:Policy Research working paper ; no. WPS 5427TF No/Name:TF092122-GENDER
Volume No:1  

Summary: Microfinance, the provision of small individual and business loans, has witnessed dramatic growth, reaching over 150 million borrowers worldwide. Much of its success has been attributed to overcoming the challenges of information asymmetries in uncollateralized lending. Yet, very little is known about the optimal contract structure of such loans -- there is substantial variation across lenders, even within a particular setting. This paper exploits a plausibly exogenous change in the liability structure offered by a microfinance program in India, which shifted from individual to group liability lending. The analysis finds compelling evidence that contract structure matters: for the same borrower, required monthly loan installments are 6 percent less likely to be missed under the group liability setting, relative to individual liability. In addition, compulsory savings deposits are 19 percent less likely to be missed under group liability contracts.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 34 pagesOfficial version*2.38 (approx.)
TextText version**
How To Order

See documents related to this project
* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.

Permanent URL for this page:

© 2016 The World Bank Group, All Rights Reserved. Legal