Fetzer, Thiemo and de Quidt, Jonathan (2012) Market structure and borrower welfare in microfinance. Economic Organisation and Public Policy Discussion Papers (EOPP 040). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.
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Abstract
Motivated by recent controversies surrounding the role of commercial lenders in microfinance, we analyze borrower welfare under different market structures, considering a benevolent non-profit lender, a for-profit monopolist, and a competitive credit market. To understand the magnitude of the effects analyzed, we simulate the model with parameters estimated from the MIX Market database. Our results suggest that market power can have severe implications for borrower welfare, while despite possible information frictions competition typically delivers similar borrower welfare to non-profit lending. In addition, for-profit lenders are less likely to use joint liability than non-profits.
| Item Type: | Monograph (Report) |
|---|---|
| Official URL: | http://sticerd.lse.ac.uk/dps/eopp/eopp40.pdf |
| Additional Information: | © 2012 The Authors |
| Divisions: | STICERD |
| Subjects: | H Social Sciences > HB Economic Theory |
| JEL classification: | I - Health, Education, and Welfare > I3 - Welfare and Poverty > I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs |
| Date Deposited: | 23 Jul 2014 10:41 |
| Last Modified: | 12 Dec 2024 05:58 |
| Funders: | University of Warwick |
| URI: | http://eprints.lse.ac.uk/id/eprint/58164 |
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