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Market Structure and Borrower Welfare in Micro Finance

Maitreesh Ghatak (), Jonathan de Quidt () and Thiemo Fetzer

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Motivated by recent controversies surrounding the role of commercial lenders in micro finance, we analyze borrower welfare under different market structures, considering a benevolent non-profit lender, a for-prfi t monopolist, and a competitive credit market. To understand the magnitude of the effects analyzed, we simulate the model with parameters estimated from the MIX Market database. Our results suggest that market power can have severe implications for borrower welfare, while despite possible information frictions competition typically delivers similar borrower welfare to non-pro t lending. In addition, for-profit lenders are less likely to use joint liability than non-profits.

Keywords: micro finance; market power; for-profit; social capital (search for similar items in EconPapers)
Date: 2013
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http://www2.warwick.ac.uk/fac/soc/economics/resear ... /123.2013_ghatak.pdf

Related works:
Journal Article: Market Structure and Borrower Welfare in Microfinance (2018) Downloads
Working Paper: Market Structure and Borrower Welfare in Microfinance (2012) Downloads
Working Paper: Market Structure and Borrower Welfare in Microfinance (2012) Downloads
Working Paper: Market structure and borrower welfare in microfinance (2012) Downloads
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