Applying Behavioral Economics to microcredit in China’s rural areas

Wesley Oliphant and Hong Ma

Journal of Behavioral and Experimental Finance, 2021, vol. 31, issue C

Abstract: To improve the provision of microcredit to farmers, this paper describes and suggests which cognitive biases in Behavioral Economics may apply to and should be tested on borrowers (farmers) and lenders (workers at Rural Credit Cooperatives) in China’s rural market for microcredit. For example, some of the biases considered are loss aversion, ambiguity aversion and the sequential bias. If biases are found, this paper also suggests what would help mitigate the biases’ negative effects. This paper is the first to apply Behavioral Economics to the lenders in China’s rural credit market.

Keywords: Microcredit; RCC; Lender; Borrower; Bias; Farmer; China; Loans (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:31:y:2021:i:c:s221463502100099x

DOI: 10.1016/j.jbef.2021.100555

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