This article is devoted to look at how the factors micro-loan risks in microfinance are related to the micro-borrowers. In this regard, the present analysis involves the using of a set representative and fundamental variables in our research. The study basically use the socio-economic and socio-demographic features specific to the micro-borrowers, which are expected to affect the repayment dela...

In Bangladesh, micro credit programs have positive socioeconomic impact on the rural women borrowers. However, it is perceived that the micro credit programs help the rural women borrowers to survive only and do not help them to develop entrepreneurial capabilities. Hence, this paper aims at identifying the factors related to the development of entrepreneurship among the rural women borrowers t...

The micro-credit movement has used innovative lending techniques to push financial frontiers. Many micro-lenders operate in an environment with no collateral and limited information about borrowers. If borrowers vary in unobservable risk, individual lending contracts may involve safe borrowers cross-subsidizing risky ones, and thus may drive safe borrowers from the market. Ghatak (1999, 2000) s...

This paper attempts to quantify the ill-effects of covariate shocks such as natural disasters on the sustainability of microfinance. The vulnerability of microfinance to covariate shocks is wellknown theoretically and in anecdotes, but very few quantitative evidence exists. For our attempt, we use a unique dataset of about 3,000 micro-borrower households covering over a period of 1994-2006 incl...

The introduction of microfinance institutions is viewed as the best alternative source financial services for low-income earners a means to raise their income and reduce poverty. However, empirical research has indicated that majority institutions’ borrowers are over-indebted. Over-indebtedness negative consequences debtors, creditors, economy whole. Since over-indebtedness context-specific phe...

This paper provides an empirical analysis of joint-liability micro-lending contracts. Using our data set from Constanta (a Georgian micro-lender), we examine the efficacy of various incentives set by this contract such as joint-liability between groups of borrowers or group access to future and to larger loans. As proposed by theory, we find that joint liability induces a group formation where ...

Using micro-level data from the mortgage market, we examine yield spreads as a funnction of both credit risk and prepayment risk using a two-stage instrumental variable approach. Our results are consistent with findings in the finance literature that leverageinduced financial risk reflected in capital structure results in higher yield spreads on debt. In particular, borrowers with loan-to-value...

Academic and political discussions about micro-finance have been found lacking in predictive power, because they are based on orthodox economic theory, which does not properly comprehend the social components of credit. I take a better approach, utilizing credit theory--specifically, Ingham's explication of how the nature of money as credit leads to social inequality. I also expound the perspec...