Matching for credit: Identifying information
asymmetries in joint-liability lending
Klein, Thilo
URN:
|
urn:nbn:de:bsz:180-madoc-688219
|
Document Type:
|
Working paper
|
Year of publication:
|
2024
|
The title of a journal, publication series:
|
ZEW Discussion Papers
|
Volume:
|
24-070
|
Place of publication:
|
Mannheim
|
Edition:
|
1915477204
|
Publication language:
|
English
|
Institution:
|
Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
|
MADOC publication series:
|
Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
|
Subject:
|
330 Economics
|
Classification:
|
JEL:
C11 , C31 , C34 , C36 , C78 , C57 , D02 , D47 , D82 , G21 , O16 , Q14,
|
Keywords (English):
|
microcredit , joint liability , diversification , market design , stable matching , endogeneity , selection model , agriculture , Thailand
|
Abstract:
|
Microcredit, a financial tool providing uncollateralized loans to low-income individuals, has seen a shift from joint-liability (JL) to individual liability (IL) lending models. This article tests a theory explaining this shift, focusing on borrowers matching into groups exposed to similar economic shocks under JL, diminishing its effectiveness. I reconcile conflicting theoretical predictions and propose an empirical strategy to distinguish adverse selection from moral hazard effects. Using data from Thailand, I find that increasing diversity within borrower groups leads to a 10 percentage point improvement in timely repayment. These results inform contract design and strategies to reduce information asymmetries in lending practices.
|
 | Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt. |
Search Authors in
You have found an error? Please let us know about your desired correction here: E-Mail
Actions (login required)
 |
Show item |
|
|