Abstract This paper provides a rationale for one of the most widely practised mechanisms by microfinance institutions (MFIs)—simultaneous borrowing and saving. Unlike existing literature, our explanation does not involve any behavioral aspect. We study dynamic relationship between benevolent MFI borrower who is subject to an ex post moral hazard problem. The optimum contract involves simultaneo...

P2P lending has become a popular financing option for individuals and small businesses, challenging the traditional system. The use of blockchain technology can optimize by reducing intermediaries utilizing smart contracts. This paper proposes blockchain-supported framework lending, exploring 2.0 features in areas such as digital contracting, risk management, regulation markets. Blockchain impr...

Using 5 experiments, the authors explored the dependency of spacing effects on rehearsal patterns. Encouraging rehearsal borrowing produced opposing effects on mixed lists (containing both spaced and massed repetitions) and pure lists (containing only one or the other), magnifying spacing effects on mixed lists but diminishing spacing effects on pure lists. Rehearsing with borrowing produced la...

We examine the dynamics of extreme values of overnight borrowing rates in an inter-bank money market before a financial crisis during which overnight borrowing rates rocketed up to (simple annual) 4000 percent. It is shown that the generalized Pareto distribution fits well to the extreme values of the interest rate distribution. We also provide predictions of extreme overnight borrowing rates b...

During economic transition, firms must dramatically reduce their financial dependence on the state and begin to borrow from nonstate capital sources. This paper draws on institutional and resource dependence theories to examine this fundamental transformation of firm capital structure during China’s transition. I propose that managers borrowed from external sources even when internal funds were...

This paper analyzes auctions where budget-constrained bidders have options to declare bankruptcy. It predicts a bidding equilibrium that changes discontinuously in a borrowing rate available to bidders. When the borrowing rate is above a threshold, high-budget bidders win, and the likelihood of bankruptcy is low. When the borrowing rate is below the threshold, the winner is the most budget-cons...