Bryan, Gharad, Karlan, Dean and Zinman, Jonathan
You can pick your friends, but you need to watch them: loan screening and enforcement in a referrals field experiment.
BREAD working paper,
Bureau for Research and Economic Analysis of Development, Durham, NC, USA.
Full text not available from this repository.
We examine a randomized trial that allows separate identification of peer
screening and enforcement of credit contracts. A South African microlender
offered half its clients a bonus for referring a friend who repaid a loan. For
the remaining clients, the bonus was conditional on loan approval. After approval,
the repayment incentive was removed from half the referrers in the
first group and added for half those in the second. We find large enforcement
effects, a $12 (100 Rand) incentive reduced default by 10 percentage points
from a base of 20%. In contrast, we find no evidence of screening.
||© 2012 Bureau for Research and Economic Analysis of Development
||information asymmetries, credit market failures, peer networks, social capital, social networks
|Library of Congress subject classification:
||H Social Sciences > HB Economic Theory
|Journal of Economic Literature Classification System:
||C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
||Departments > Economics
Collections > Economists Online
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