Can microfinance lending crowd out informal lenders? Evidence from the Philippines

Cherry Wyle G. Layaoen and Kazushi Takahashi

Journal of International Development, 2022, vol. 34, issue 2, 379-414

Abstract: This study examines whether microfinance lending increases or decreases the likelihood and amount of credit that households demand from informal lenders. Multivariate probit and seemingly unrelated regression models are applied using nationally representative data collected in the Philippines. The estimation results indicate that microfinance ‘crowds out’ informal lending from both moneylenders and relatives and friends. Moreover, households with microfinance loans are less likely to borrow from other formal financial institutions. These results highlight the importance of developing a well‐tailored microfinance scheme that reaches the entire population in order to achieve financial inclusion.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/jid.3604

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:34:y:2022:i:2:p:379-414

Access Statistics for this article

Journal of International Development is currently edited by Paul Mosley and Hazel Johnson

More articles in Journal of International Development from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().