Over-Indebtedness in Microfinance – An Empirical Analysis of Related Factors on the Borrower Level

Jessica Schicks

World Development, 2014, vol. 54, issue C, 301-324

Abstract: This paper analyzes the over-indebtedness of microborrowers in Ghana from a customer protection perspective. It measures over-indebtedness as a subjective indicator based on loan-related sacrifices that borrowers report. It finds that male microborrowers are more likely to be over-indebted. So are borrowers with adverse economic shocks, low returns on investment, and non-productive loan use. Over-indebtedness is lower for borrowers with good debt-literacy. General financial literacy and numeracy seem insufficient to reduce over-indebtedness. The paper details the relationship of the above factors to the specific sacrifices borrowers make and suggests that policy measures address the full complexity of the over-indebtedness phenomenon.

Keywords: microfinance; over-indebtedness; customer protection; sacrifices; Africa; Ghana (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (38)

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Working Paper: Over-Indebtedness in Microfinance – An Empirical Analysis of Related Factors on the Borrower Level (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:54:y:2014:i:c:p:301-324

DOI: 10.1016/j.worlddev.2013.08.009

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