IS THE CREDIT WORTH IT? FOR‐PROFIT LENDERS IN MICROFINANCE WITH RATIONAL AND BEHAVIORAL BORROWERS. (25th January 2018)

• Record Type: Journal Article
• Authors: DE QUIDT, Jonathan; GHATAK, Maitreesh
• Other Names: MARINI MARCO guestEditor.; THIRY BERNARD guestEditor.
• Is Part Of: Annals of public and cooperative economics. Volume 89:Number 1(2018:Mar.)
• Page Start: 175
• Page End: 199
• Publication Date: 2018-01-25
• Subjects: Microcredit -- for‐profit lending -- behavioral borrowers -- O16 -- G21 -- D4 -- G41; Cooperative societies -- Periodicals; 336
• DOI: 10.1111/apce.12189
• Languages: English
• ISSNs: 1370-4788

Abstract

ABSTRACT: The bulk of the literature on microcredit has focused on either not‐for‐profit lenders or assumes a perfectly competitive, zero‐profit market equilibrium. Yet the market has experienced a significant shift toward for‐profit lending and the assumptions of perfect competition are likely to be too strong in many locations. We review the state of the literature on for‐profit lending in microcredit, consider its implications for both conventionally 'rational' borrowers and for borrowers with behavioral biases, and point out directions for future research.