Cost Efficient Joint Liability Lending

Ralph-C Bayer () and Sujiphong Shatragom ()
Additional contact information
Sujiphong Shatragom: School of Economics, University of Adelaide

No 2013-23, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: Traditional micro-lending schemes suffer from high transaction costs relative to the loan size, which renders many small loans uneconomical. This paper proposes an alternative lending protocol with lower transaction costs and shows that in theory repayment rates are not compromised. We then use laboratory experiments to confirm this finding. Finally we conclude that our lending protocol if implemented could improve social welfare by reducing transaction cost.

Keywords: microfinance; group lending; group liability; joint liability. (search for similar items in EconPapers)
JEL-codes: C70 C92 D71 D82 O12 O16 (search for similar items in EconPapers)
Pages: 25 pages.
Date: 2013-11
New Economics Papers: this item is included in nep-ban, nep-exp, nep-law and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://media.adelaide.edu.au/economics/papers/doc/wp2013-23.pdf (application/pdf)

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:adl:wpaper:2013-23

Access Statistics for this paper

More papers in School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy Contact information at EDIRC.
Bibliographic data for series maintained by Qazi Haque ().