Credit risk in colonial India
Bibliographic Data
| ID | 3403781 |
|---|---|
| Authors | Maanik Nath (0000-0002-3523-4160, Utrecht University, corresponding author) |
| Year | 2022 |
| Volume | 75 |
| Issue | 2 |
| Pages | 396-420 |
| Publication date | 2022-05-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic History Review (JOURNAL) |
| Journal identifiers | ISSN: 0013-0117 • E-ISSN: 1468-0289 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ehr.13108 |
| OpenAlex | W3198472690 |
| Language | EN |
| Citations received | 1 |
| References cited | 37 |
Credit was scarce and expensive in colonial India. Existing explanations assume a lack of market competition let moneylenders charge high interest rates. The article challenges this view and constructs a novel framework to explain the rationality and strategies of lenders. Using new evidence from the Madras Presidency, the study finds that the interconnected issues of climate volatility and enforcement costs shaped the supply and prices of credit. Climate volatility and uncertain seasonal incomes led to high default rates. Enforcement of contracts through courts was expensive and not appropriate where there was no wilful breach of contract. Moneylenders responded to risk in innovative ways. They rationed credit and imposed inflexible enforcement terms in the dry regions that faced higher climatic risk, but used contracts and flexible pricing strategies in the irrigated zones where risks were lower
Business · Economics · Enforcement · Financial economics · Interest rate · Monetary economics · Political science · Volatility (finance) · African studies and sociopolitical issues · Culture, Economy, and Development Studies · Historical Economic and Social Studies · Law
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| Unique citing works | 1 |
|---|---|
| Citations per year | 0.33 |
| Citation span | 2023 - 2023 (1) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 1 |