Publication detail

Behavioral Foundations of Microcredit: Experimental and Survey Evidence from Rural India (M. Bauer, J. Chytilová, J. Morduch)

Author(s): doc. PhDr. Michal Bauer Ph.D., Jonathan Morduch
doc. PhDr. Julie Chytilová Ph.D., Jonathan Morduch
Type: Articles in journals with impact factor
Year: 2012
Number: 0
ISSN / ISBN: 0002-8282
Published in: American Economic Review 102(2): 1118-1139
Publishing place:
Keywords: time discounting, hyperbolic discounting, loan contracts, microfinance
JEL codes: C93, D91, O12
Suggested Citation:
Grants: GACR Postdoc - Endogenous social preferences and economic behavior GACR Postdoc - Poverty and Inter-temporal Choices Global Development Network - The Role of Education in Patience Formation IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: Microcredit is celebrated as an innovative tool to reduce poverty. We integrate experimental measures of time discounting and risk aversion for a sample of 573 villagers in south India with survey data on their financial activity. The data show that the demand for microcredit loans is tied to time-inconsistent preferences. Women with hyperbolic preferences save less at home and save less in total levels. They are also more likely to borrow generally, but to do so through microcredit institutions specifically. The finding suggests that the structure of microcredit loan contracts helps people with self-discipline problems who lack suitable saving devices.
Downloadable: Microcredit
Microcredit Online Appendix

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