LEARNING BY ASSOCIATION: MICRO CREDIT IN CHIAPAS, MEXICO | Zendy

BARBOZA GUSTAVO A. | Zendy; BARRETO HUMBERTO | Zendy

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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 )

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