TY  - BOOK
AU  - Carpena,Fenella
AU  - Carpena,Fenella
AU  - Cole,Shawn
AU  - Shapiro,Jeremy
AU  - Zia,Bilal
TI  - Liability structure in small-scale finance: evidence from a natural experimen 
PY  - 2010///
CY  - Washington, D.C.
PB  - The World Bank
KW  - Access to Finance
KW  - Bankruptcy and Resolution of Financial Distress
KW  - Borrower
KW  - Collateral
KW  - Commercial banks
KW  - Debt Markets
KW  - Deposit Insurance
KW  - Emerging markets
KW  - Expenditure
KW  - Finance and Financial Sector Development
KW  - Financial market
KW  - Financial support
KW  - Income inequality
KW  - Information asymmetries
KW  - International bank
KW  - Lenders
KW  - Liability
KW  - Loan
KW  - Microcredit
KW  - Microfinance
KW  - Optimal contract
KW  - Provision of credit
KW  - Savings deposits
KW  - Transaction
KW  - Transaction costs
N2  - Microfinance, the provision of small individual and business loans, has witnessed dramatic growth, reaching over 150 million borrowers worldwide. Much of its success has been attributed to overcoming the challenges of information asymmetries in uncollateralized lending. Yet, very little is known about the optimal contract structure of such loans - there is substantial variation across lenders, even within a particular setting. This paper exploits a plausibly exogenous change in the liability structure offered by a microfinance program in India, which shifted from individual to group liability lending. The analysis finds compelling evidence that contract structure matters: for the same borrower, required monthly loan installments are 6 percent less likely to be missed under the group liability setting, relative to individual liability. In addition, compulsory savings deposits are 19 percent less likely to be missed under group liability contracts
UR  - http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-5427
ER  -