Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries

Pushkar Maitra, Sandip Mitra, Dilip Mookherjee and Sujata Visaria
Authors registered in the RePEc Author Service: Sujata Visaria and Sujata Visaria

No 26730, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We compare two different methods of appointing a local commission agent as an intermediary for a credit program. In the Trader-Agent Intermediated Lending Scheme (TRAIL), the agent was a randomly selected established private trader, while in the Gram Panchayat-Agent Intermediated-Lending Scheme (GRAIL), he was randomly chosen from nominations by the elected village council. More TRAIL loans were taken up, but repayment rates were similar, and TRAIL loans had larger average impacts on borrowers' farm incomes. The majority of this difference in impacts is due to differences in treatment effects conditional on farmer productivity, rather than differences in borrower selection patterns. The findings can be explained by a model where TRAIL agents increased their middleman profits by helping more able treated borrowers reduce their unit costs and increase output. In contrast, for political reasons GRAIL agents monitored the less able treated borrowers and reduced their default risk.

JEL-codes: H42 I38 O13 O16 O17 (search for similar items in EconPapers)
Date: 2020-02
Note: DEV POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.nber.org/papers/w26730.pdf (application/pdf)

Related works:
Journal Article: Decentralized Targeting of Agricultural Credit Programs: Private Versus Political Intermediaries (2024)
Working Paper: Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries (2021)
Working Paper: Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries (2021)
Working Paper: Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries (2020)
Working Paper: Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries (2020)
Working Paper: Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries (2020)
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:nbr:nberwo:26730

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26730

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().