nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒09‒17
one paper chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Financial Access Under the Microscope By Camelia Minoiu

  1. By: Camelia Minoiu
    Abstract: We examine the impact of a large-scale microcredit expansion program on financial access and the transition of previously unbanked borrowers to commercial banks. Administrative data on the universe of loans to individuals show that the program improved access to credit, especially in underdeveloped areas. A sizeable share of first-time borrowers who need a second loan switch from microfinance institutions to commercial banks, which cream-skim low-risk borrowers and grant them larger, cheaper, and longer-term loans. These borrowers are not riskier than those already at commercial banks. The microfinance sector, together with well-functioning credit reference bureaus, help mitigate information frictions in credit markets.
    Keywords: Financial inclusion, microfinance, loan expansion programs, credit reference bureau
    JEL: G21 O12 O55
    Date: 2018–09
    URL: http://d.repec.org/n?u=RePEc:nva:unnvaa:wp05-2018&r=fle

This nep-fle issue is ©2018 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.