Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 129 - 144 |
| Number of pages | 16 |
| Journal | Entrepreneurship: Theory and Practice |
| Volume | 39 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2015 |
Cite this
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Selection of borrowing partners in joint liability-based microcredit: Evidence from framed field experiments in Bangladesh. / Chakravarty, Sugato; Shahriar, Abu Zafar.
In: Entrepreneurship: Theory and Practice, Vol. 39, No. 1, 2015, p. 129 - 144.Research output: Contribution to journal › Article › Research › peer-review
TY - JOUR
T1 - Selection of borrowing partners in joint liability-based microcredit: Evidence from framed field experiments in Bangladesh
AU - Chakravarty, Sugato
AU - Shahriar, Abu Zafar
PY - 2015
Y1 - 2015
N2 - We analyze partner selection decisions in the formation of borrowing groups in joint liability based microcredit. We do so within the context of a framed field experiment with the owners of small businesses in rural Bangladesh. We find that when, irrespective of their project status, borrowers are required to make joint liability payments, risky borrowers will offer side payments that are sufficiently large to attract safe borrowers, leading to the formation of heterogeneous risk-matched groups. We discuss the implications of heterogeneous risk matching for the survival and success of small enterprises, and their financiers, in countries with a weak institutional environment.
AB - We analyze partner selection decisions in the formation of borrowing groups in joint liability based microcredit. We do so within the context of a framed field experiment with the owners of small businesses in rural Bangladesh. We find that when, irrespective of their project status, borrowers are required to make joint liability payments, risky borrowers will offer side payments that are sufficiently large to attract safe borrowers, leading to the formation of heterogeneous risk-matched groups. We discuss the implications of heterogeneous risk matching for the survival and success of small enterprises, and their financiers, in countries with a weak institutional environment.
U2 - 10.1111/etap.12142
DO - 10.1111/etap.12142
M3 - Article
VL - 39
SP - 129
EP - 144
JO - Entrepreneurship: Theory and Practice
JF - Entrepreneurship: Theory and Practice
SN - 1042-2587
IS - 1
ER -