This paper studies the equilibrium predatory practices that may arise when the borrowers have behavioral weaknesses. Rational lenders offer short term contracts that can be renewed at the cost of paying a penalty fee. We show how the optimal contracts depend on the degree of näıveté of the time inconsistent customers. Penalty fees have a dual role : they increase market share by providing a use...

â â â â  kangwon national university, south korea â â yonsei university, south korea â â  [1] â  kangwon national university, south korea â â â  abstract â  t his paper aims to understand the structure and determinants of international bank l ending among apec economies. specifically, this paper first aims to analyze whether australia canada japan chinese taipei and the united states, which are...

Micro…nance is typically associated with joint liability of group members. However, a large part of micro…nance institutions rather o¤ers individual instead of group loans. We analyze the incentive mechanisms in both individual and group contracts. Moreover, we show that micro…nance institutions o¤er group loans when the loan size is rather large, re…nancing costs are high, and competition betw...

This paper presents a theoretical model to describe the effects of default risk on international lending to LDC sovereign borrowers. The threat of defaults in international lending is shown to give rise to many characteristics of the syndicated loan market: (1) quantity rationing of loans; (2) LDC policies designed to enhance creditworthiness; (3) prevalence of short maturities on international...

This paper examines the e↵ects of intra-financial lending – claims between financial institutions – on aggregate investment and credit to the non-financial sector in the United States. Building on Montecino, Epstein, and Levina (2014) we document a large growth in intra-financial assets beginning in the early 1980s. Using a vector autoregression model, we find that intra-financial lending is ne...

As an important supplement to my country's financial institutions, micro-loan companies serve "agriculture, rural areas and farmers", small micro enterprises, individuals, a certain extent, alleviating the financing difficulties of such groups regulating private finance. However, only lend but do not deposit. In process lending, due inadequate risk management, problem has become increasingly pr...

In this paper, we analyze patterns of transaction between individuals using data drawn from Kiva.org, a global online crowdfunding platform that facilitates prosocial, peer-to-peer lending. Our analysis, which employs an aggregate dataset of country-to-country lending volumes based on more than three million individual lending transactions that took place between 2005 and 2010, considers the du...

Peer-to-peer lending is hypothesized to help equalize economic opportunities for the world's poor. We empirically investigate the "flat-world" hypothesis, the idea that globalization eventually leads to economic equality, using crowdfinancing data for over 660,000 loans in 220 nations and territories made between 2005 and 2013. Contrary to the flat-world hypothesis, we find that peer-to-peer le...