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WHO GETS WHAT? DETERMINANTS OF LOAN SIZE AND CREDIT RATIONING AMONG MICROCREDIT BORROWERS: EVIDENCE FROM NICARAGUA
Author(s) -
Mason David R.
Publication year - 2014
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.2899
Subject(s) - credit rationing , loan , microfinance , joint and several liability , business , rationing , consumption (sociology) , economics , institution , credit history , financial system , monetary economics , finance , interest rate , liability , economic growth , health care , social science , tort , sociology , law , political science
Joint liability microcredit lending employs members' trust and social networks to screen and monitor members. Lenders may use this information along with a formal application to determine the size and terms of the loan they disburse. Yet it is unclear what factors influence loan size. This paper examines two questions related to credit consumption: the size of loans disbursed and whether the borrower was credit rationed, using a sample of clients from Nicaragua. Findings suggest that borrower assets, gender and length of time with the lending institution influence the size of loans received. Recent evidence has also suggested that credit rationing may be related to loan officer discrimination, although evidence for this and other factors here is not clear. Copyright © 2013 John Wiley & Sons, Ltd.