Is the credit worth it? For-profit lenders in microfinance with rational and behavioral borrowers

de Quidt, Jonathan and Ghatak, Maitreesh ORCID: 0000-0002-0126-0897 (2018) Is the credit worth it? For-profit lenders in microfinance with rational and behavioral borrowers. Annals of Public and Cooperative Economics, 89 (1). pp. 175-199. ISSN 1370-4788

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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.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14678292
Additional Information:	© 2018 John Wiley & Sons
Divisions:	Economics
Subjects:	H Social Sciences > HG Finance
Date Deposited:	18 Apr 2018 09:12
Last Modified:	01 Apr 2024 08:10
URI:	http://eprints.lse.ac.uk/id/eprint/87515

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