Weather Variability, Credit Scores and Access to Credit: Evidence from Colombian Coffee Farmers

47 Pages Posted: 3 Feb 2020

See all articles by Nicolás de Roux

Nicolás de Roux

Universidad de los Andes - Department of Economics

Date Written: January 21, 2020

Abstract

This paper studies how weather variability affects credit scores and credit access in developing countries. Using rich administrative data on loans to coffee farmers from a large Colombian bank, I show that negative weather shocks lead to lower loan repayment, lower credit scores and more frequent denials of future loan applications. I present evidence that affected farmer's income and ability to repay recover more quickly from weather shocks than credit access. Therefore, the interplay of weather variability and credit scores can lead to the exclusion from credit markets of farmers who could repay a loan.

Keywords: Weather Shocks, Credit Scores, Access to Credit, Coffee

JEL Classification: G21, O12, O13, Q12, Q14, Q18, Q54

Suggested Citation

de Roux, Nicolás, Weather Variability, Credit Scores and Access to Credit: Evidence from Colombian Coffee Farmers (January 21, 2020). Documento CEDE No. 2020-01. Available at SSRN: https://ssrn.com/abstract=3529396 or http://dx.doi.org/10.2139/ssrn.3529396

Nicolás De Roux (Contact Author)

Universidad de los Andes - Department of Economics ( email )

Carrera 1a No. 18A-10
Bogota, AA4976
Colombia

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