The Role of Credit Officers in the Performance of Micro Loans
Université Paris I Panthéon Sorbonne, UMR 201; Université libre de Bruxelles, CERMi
Economics of Transition, Vol. 20, Issue 2, pp. 271-297, 2012
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.
Number of Pages in PDF File: 27
Keywords: Credit officer, microfinance, microcredit, screening, audit, delay, default, experience
JEL Classification: D82, D83, L31, O16, O54
Date posted: March 20, 2012