The allocation of capital in rural credit markets∗
نویسندگان
چکیده
Understanding how capital flows within rural communities in sub-Saharan Africa can provide important insights on the nature of poverty and the effectiveness of financial intermediation interventions. In this paper, we use unique individual level savings and borrowing data to study the flow of funds within a sample of 104 Ugandan savings groups. We show that poor households borrow from wealthier households, which implies that the marginal benefit of money is decreasing in wealth. The result suggests that savings groups are effective at channeling funds to their poorest members. JEL classification: G21; O16.
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