Lending Without Access to Collateral A Theory of Micro-Loan Borrowing Rates & Defaults
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چکیده
A model of micro loans is used to determine the equilibrium borrowing rates, and default probabilities. Monitoring by lenders is critical for an equilibrium to exist in our model if the maturity of the loan is long. With short maturity loans, monitoring is shown to be counterproductive. The manner in which the loan rates depend on the market structure, monitoring costs, joint-liability provisions and punishment technology is characterized when the borrowing group optimally chooses the timing of default. Designing the loan contract so that borrowers make higher payments in good states and lower payments in bad states is shown to be pareto improving. ∗Columbia University, Email: [email protected]. †811 Uris Hall, Columbia University, 3022 Broadway, New York, NY 10027. Email: [email protected] 1
منابع مشابه
Lending Without Access to Collateral A Theory of Micro-Loan Borrowing Rates∗
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تاریخ انتشار 2012