Market Structure and Borrower Welfare in Microfinance

Dados Bibliográficos

ID9720719
AutoresJonathan de Quidt (Institute for International Economic Studies), Thiemo Fetzer (0000-0002-3471-3469, University of Warwick), Maitreesh Ghatak (0000-0002-6231-5580, London School of Economics and Political Science)
Ano2018
Volume128
Fascículo610
Páginas1019-1046
Data de publicação2018-05-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12591
OpenAlexW2799523249
IdiomaEN
Citações recebidas14
Referências citadas30

Motivated by recent controversies surrounding the role of commercial lenders in microfinance, we analyze borrower welfare under different market structures, considering a benevolent non-profit lender, a for-profit 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-profit lending. In addition, for-profit lenders are less likely to use joint liability than non-profits

Bond market · Business · Economics · Joint and several liability · Liability · Market economy · Market power · Market structure · Microeconomics · Microfinance · Monetary economics · Monopoly · Profit (economics · Welfare · Finance · FinTech, Crowdfunding, Digital Finance · Islamic Finance and Banking Studies · Microfinance and Financial Inclusion