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LEARNING BY ASSOCIATION: MICRO CREDIT IN CHIAPAS, MEXICO
Author(s) -
BARBOZA GUSTAVO A.,
BARRETO HUMBERTO
Publication year - 2006
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1093/cep/byj020
Subject(s) - payment , nonmarket forces , economics , survey data collection , peer group , association (psychology) , business , credit history , public economics , demographic economics , finance , microeconomics , psychology , developmental psychology , statistics , mathematics , factor market , philosophy , epistemology
Micro credit programs provide institutional arrangements for low‐income people to transit from nonmarket to market‐oriented settings. This article develops a data set of payment records to determine micro credit participants' behavior on repayment performance. The findings shed new light strongly supporting micro credit as a feasible alternative to successfully provide financial resources to the poor, when controlling for asymmetric information. The empirical evidence indicates that learning by association through peer mentoring is a significant determinant in explaining high repayment rates, whereas peer monitoring is not. (JEL O1 , O17 , L31 , J15 )