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Asset Ownership and Microloan Repayment: Examining Data from Bangladesh
Author(s) -
White Roger,
Alam Shamma Adeeb
Publication year - 2013
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/dpr.12010
Subject(s) - asset (computer security) , loan , probit model , business , probit , land tenure , economics , negative binomial distribution , finance , actuarial science , econometrics , statistics , geography , agriculture , computer security , mathematics , archaeology , poisson distribution , computer science
Employing data for 34,255 loans made by the Bangladesh Rural Advancement Committee (BRAC) to 12,455 repeat borrowers during the 2002–6 period, this article examines the relationship between borrowers' asset holdings and microloan repayment. Estimating a series of binomial probit specifications, it finds a positive relationship between land ownership and loan repayment; however, taken collectively, ownership of non‐land assets diminishes the likelihood of repayment. Influences of specific assets on repayment probabilities vary across asset types: ownership of land, corrugated tin houses, vans and rickshaws increases the likelihood of repayment, while ownership of sewing machines, televisions, radios and bicycles corresponds with a decreased repayment probability.