Learning By Association: Micro Credit in Chiapas, Mexico

16 Pages Posted: 30 May 2006

See all articles by Gustavo A. Barboza

Gustavo A. Barboza

Clarion University - College of Business Administration

Humberto Barreto

DePauw University

Abstract

Micro credit programs provide institutional arrangements for low-income people to transit from nonmarket to market-oriented settings. This article develops a data set of payment records to determine micro credit participants' behavior on repayment performance. The findings shed new light strongly supporting micro credit as a feasible alternative to successfully provide financial resources to the poor, when controlling for asymmetric information. The empirical evidence indicates that learning by association through peer mentoring is a significant determinant in explaining high repayment rates, whereas peer monitoring is not.

Suggested Citation

Barboza, Gustavo A. and Barreto, Humberto, Learning By Association: Micro Credit in Chiapas, Mexico. Contemporary Economic Policy, Vol. 24, No. 2, pp. 316-331, April 2006, Available at SSRN: https://ssrn.com/abstract=904957

Gustavo A. Barboza (Contact Author)

Clarion University - College of Business Administration ( email )

305 Still Hall
Clarion, PA 16214
United States

Humberto Barreto

DePauw University ( email )

Greencastle, IN 46135
United States
765-365-4099 (Phone)

HOME PAGE: http://https://www.depauw.edu/learn/econexcel/

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