Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India

Pushkar Maitra, Sandip Mitra,, Dilip Mookherjee, Alberto Motta and Sujata Visaria
Authors registered in the RePEc Author Service: Sujata Visaria and Sujata Visaria

No 35-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: We experimentally evaluate two micro-lending schemes to finance high-value smallholder agriculture. Loans featured durations that matched crop cycles, low interest rates, dynamic repayment incentives and index insurance. In the TRAIL design, the lender incentivized a local trader to recommend borrowers for individual-liability loans. In GBL, it offered joint-liability loans to self-formed groups, who attended high-frequency meetings and met savings targets. TRAIL loans increased potato cultivation and farm incomes by 17{21%, but GBL loans had insignificant effects, because TRAIL borrowers were more productive and lower-risk. TRAIL loans had higher repayment and take-up rates, and lower administrative costs than GBL loans.

Keywords: Agricultural Finance; Agent Based Lending; Group Lending; Selection; Repayment (search for similar items in EconPapers)
JEL-codes: D82 O1 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2014-09
New Economics Papers: this item is included in nep-agr and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Financing smallholder agriculture: An experiment with agent-intermediated microloans in India (2017)
Working Paper: Financing Smallholder Agriculture: An Experiment wth Agent-Intermediated Microloans in India (2016)
Working Paper: Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India (2015)
Working Paper: Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India (2014)
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