Microcredit in Pre-Famine Ireland

44 Pages Posted: 19 May 1997

See all articles by Aidan Hollis

Aidan Hollis

University of Calgary - Department of Economics

Arthur Sweetman

McMaster University - Department of Economics; McMaster University - Centre for Health Economics and Policy Analysis (CHEPA); IZA Institute of Labor Economics

Date Written: April 1997

Abstract

Hundreds of independent, local, quasi-charitable microcredit societies, or "loan funds," were lending to as many as 20% of Irish households in the mid-nineteenth century. Monitored by a central regulatory authority, funds in the system were successful in mitigating informational, moral hazard and enforcement problems, and thus operated at a surplus in a market where intermediation by the banks seems not to have been possible. Created under special legislation, their goal was to relieve poverty by providing credit to the "industri- ous poor" on a large scale, at competitive interest rates, without public funding. Evidence from the loan funds offers new insights into capital formation in the Irish economy of the nineteenth century and suggests that traditional notions regarding the economic activities of the Irish poor may need to be rethought; it is also relevant for development economists studying current microcredit initiatives.

JEL Classification: N23

Suggested Citation

Hollis, Aidan and Sweetman, Arthur, Microcredit in Pre-Famine Ireland (April 1997). Available at SSRN: https://ssrn.com/abstract=1297 or http://dx.doi.org/10.2139/ssrn.1297

Aidan Hollis (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
403-220-5861 (Phone)
403-220-5262 (Fax)

Arthur Sweetman

McMaster University - Department of Economics ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

McMaster University - Centre for Health Economics and Policy Analysis (CHEPA) ( email )

1280 Main St. W
Hamilton, ON L8S 4M4
Canada

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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