Formal and informal sectors: Interactions between moneylenders and traditional banks in the rural Indian credit market

Cristina Elisa Orso

POLIS Working Papers from Institute of Public Policy and Public Choice - POLIS

Abstract: This paper describes, through a theoretical approach, the interactions between institutional lenders and local moneylenders, and how these affect the rural credit market. It evaluates the effects produced by the introduction of "spillovers" in a rural credit market with rationing in which banks and moneylenders interact simultaneously while working in distinct segments. Due to the strong and consolidated social ties, it is probable that the spread of knowledge concerning potential debtors comes about in targeted and rapid way with reduced costs for the lenders as well.

JEL-codes: G21 O17 O19 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2009-10
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:uca:ucapdv:135

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