This paper studies an incentive rationale for the use of group lending as a method of financing liquidity-constrained entrepreneurs. The joint liability feature associated with group lending lowers the liquidity risk of default but creates a free-riding problem. In the static setting, the free-riding problem dominates the liquidity risk effect under a plausible condition, thus making group lend...

We exploit the 2004 Indian Ocean Tsunami as a natural experiment to investigate how aggregate bank lending changes in response to a large and unexpected shock. Using a dataset comprising aggregate bank loans at provincial level, we assess the impact of the Indian Ocean Tsunami of 2004 on aggregate provincial lending in Thailand. The results of a Difference-in-Differences investigation suggest t...

We study lender behavior in the peer-to-peer (P2P) lending market, where individuals bid on unsecured microloans requested by other individual borrowers. Online P2P exchanges are growing, but lenders in this market are not professional investors. In addition, lenders have to take big risks because loans in P2P lending are granted without collateral. While the P2P lending market shares some char...

This paper explores how borrowers’ financial and personal information, loan characteristics and lending models affect peer-to-peer (P2P) loan funding outcomes. Using a large sample of listings from one of the largest Chinese online P2P lending platforms, we find that those borrowers earning a higher income or who own a car are more likely to receive a loan, pay lower interest rates, and are les...

OBJECTIVES Few prospective studies are available on the relationship between incarceration and HIV risk among injection drug users (IDUs). The authors evaluated self-reported rates of syringe sharing and incarceration among a cohort of IDUs. METHODS This study analyzed syringe lending by HIV-infected IDUs and syringe borrowing by HIV-negative IDUs among participants enrolled in the Vancouver ...

This paper studies the effect of bank branch closures on local lending in the Digital Ages. I use the mergers between big banks as an exogenous shock to create a quasi-random experiment. Combining the difference-in-differences and the instrumental variable methods, I find that the closure of each physical branch causes a 20% decrease in the total number and the volume of small business lending,...

The publication of the ‘Fed Boston Study’ drew considerable attention to the long-standing issue of discrimination of minorities in mortgage lending. Federal regulators have since stepped up their efforts to enforce greater compliance of banks with various fair-lending laws. Stengel & Glennon (1999), in their influential paper, offered the industry a statistical methodology that individual bank...

This paper reports the results of a large-scale field experiment designed to test the hypothesis that group membership can increase participation and prosocial lending for an online crowdlending community, Kiva. The experiment uses variations on a simple email manipulation to encourage Kiva members to join a lending team, testing which types of team recommendation emails are most likely to get ...