This paper explores the significance of unobservable default risk in mortgage and automobile loan markets. I develop and estimate a two-period model that allows for heterogeneous forms of simultaneous adverse selection and moral hazard. Controlling for income levels, loan size and risk aversion, I find robust evidence of adverse selection, with borrowers self-selecting into contracts with varyi...

Based on a survey of 897 farming households in Shaanxi and Gansu provinces, our results show that while farming households had high demands for capital, 47.7% have experienced having their application for a Rural Credit Cooperative (RCC) loan denied because of their low income. Agricultural production and income are significantly influenced by weather risks, and agricultural income accounts for...

Bank plays the central role for the economic development world-wide. The failure and success of the banking sector depends upon the ability to proper evaluation of credit risk. Credit risk evaluation of any potential credit application has remained a challenge for banks all over the world till today. Artificial neural network plays a tremendous role in the field of finance for making critical, ...

PLEASE NOTE: The opinions expressed in this publication do not necessarily represent an IFOAM approved position. Acknowledgements This paper reflects the experience and wealth of expertise of many people in the organic and environmental movements. I would like to thank all those who have commented on the paper and the many authors whose work this paper draws from. In particular I would like to ...

In this paper, we examine differences in default risks for formal, informal and semi-formal loans and analyze the determinants of default risks regarding the three credit sources, using household data for Vietnam. We find that smaller-sized households with collateral and/or a guarantor borrow primarily from formal and semi-formal lenders whereas female contractors, large-sized households and bo...