For compassion or money? The factors influencing the funding of micro loans

Lauren Heller and Kayla D. Badding

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2012, vol. 41, issue 6, 831-835

Abstract: Aided by the Internet, microfinance institutions have found new ways to expand the reach of financing entrepreneurial projects on a small scale. Using a unique data set of individual loans posted to Kiva.org, we explore the determinants of lenders’ nonprofit lending choices in the growing microfinance industry. We find that lenders make choices in purposive ways even in the absence of market interest rates, especially with respect to the demographic characteristics of borrowers and the uses of proposed funds. Hence, the results provide valuable new information about consumer choice in charitable giving and investment.

Keywords: Microfinance; Lending; Preferences; Kiva (search for similar items in EconPapers)
JEL-codes: A1 O1 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:41:y:2012:i:6:p:831-835

DOI: 10.1016/j.socec.2012.08.005

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