New Microfinance? Informal Credit and Group Lending in Competitive Markets

36 Pages Posted: 23 Dec 2003

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Date Written: March 2003

Abstract

In this paper we present a model of competition between informal lending and group lending. The paper is organized as follows. The second paragraph reviews the economic literature that analyzes separately group contracts and informal lending markets. The third paragraph tries to answer the following question: "Can the credit group play a role in competitive markets?", where competitive markets are characterized by two features: markets where the lender acts under no profit condition, and at the same time the borrower can choose among different types of contracts (i.e., informal lending contracts and credit group contracts). The fourth paragraph concludes.

Note: Downloadable document is in Italian.

JEL Classification: D28, G20, G21, L14, O16, O17

Suggested Citation

Masciandaro, Donato and Dalla Pellegrina, Lucia, New Microfinance? Informal Credit and Group Lending in Competitive Markets (March 2003). Universita di Lecce Economics Working Paper No. 39/20. Available at SSRN: https://ssrn.com/abstract=448260 or http://dx.doi.org/10.2139/ssrn.448260

Donato Masciandaro

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Lucia Dalla Pellegrina (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

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