Economics at your fingertips  

How far can we go? Determining the optimal loan size in progressive lending

Nahla Dhib () and Arvind Ashta ()
Additional contact information
Nahla Dhib: Université Côte D'Azur, CNRS, LJAD (France)

Working Papers from HAL

Abstract: The microcredit literature indicates that progressive lending should reduce default rates but that it may lead to over-indebtedness. In this study, we show that progressive lending may be safe over a range of loan sizes, beyond which a rational borrower would indulge in a strategic default. This range of loan sizes may be dependent on borrower characteristics (risk-taking, self-confidence, productivity, interest rates, subsistence needs) as well as the Microfinance Institution's strategy. Many crowdfunding sites are using artificial intelligence to assess borrower risk through social ratings. We are arguing that production functions of the borrowers also need to be added.

Date: 2020-11-12
New Economics Papers: this item is included in nep-ban, nep-fdg and nep-mfd
Note: View the original document on HAL open archive server:
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2021-04-26
Handle: RePEc:hal:wpaper:hal-03001840