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The Role of Credit Officers in the Performance of Micro Loans

27 Pages Posted: 20 Mar 2012  

Isabelle Agier

Université Paris I Panthéon Sorbonne, UMR 201; Université libre de Bruxelles, CERMi

Date Written: April 2012

Abstract

This paper proposes a structural model explicitly considering the role played by credit officers in loan performance. The credit officer's ability is decomposed into the screening and the audit stage. This model is estimated using a rich database from VivaCred – a Brazilian NGO. Results suggest that: (i) there is substantial heterogeneity among credit officers in the sample; (ii) their ability affects more the screening than the audit stage; and (iii) their estimated ability is correlated with their experience at VivaCred but not with their experience before joining the organization. Evidence suggests that a reduction in staff turnover would be beneficial to the institution.

Keywords: Credit officer, microfinance, microcredit, screening, audit, delay, default, experience

JEL Classification: D82, D83, L31, O16, O54

Suggested Citation

Agier, Isabelle, The Role of Credit Officers in the Performance of Micro Loans (April 2012). Economics of Transition, Vol. 20, Issue 2, pp. 271-297, 2012. Available at SSRN: https://ssrn.com/abstract=2026342 or http://dx.doi.org/10.1111/j.1468-0351.2012.00434.x

Isabelle Agier (Contact Author)

Université Paris I Panthéon Sorbonne, UMR 201 ( email )

IEDES, 45 bis avenue de la Belle Gabrielle
Nogent sur Marne, 94736
France

Université libre de Bruxelles, CERMi

Avenue F.D. Roosevelt 21 - CP145/1
Brussels, B-1050
Belgium

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