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on Microfinance |
| By: | Bos, Jaap; de Haas, Ralph; Millone, Matteo |
| Abstract: | We analyze contract-level data on approved and rejected microloans to assess the impact of a new credit registry in Bosnia and Herzegovina, a country with a competitive microcredit market. Our findings are threefold. First, information sharing reduces defaults, especially among new borrowers, and increases the return on lending. Second, lending tightens at the extensive margin as loan officers, using the new registry, reject more applications. Third, lending also tightens at the intensive margin: microloans become smaller, shorter and more expensive. This affects both new borrowers and lending relationships established before the registry. In contrast, repeat borrowers whose lending relationship started after the registry introduction begin to benefit from larger loans at lower interest rates. |
| Keywords: | Credit registry; information sharing; microcredit; overborrowing |
| JEL: | D04 D82 G21 G28 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14464&r=all |
| By: | Aker, Jenny; Blumenstock, Joshua; Dillon, Brian |
| Abstract: | Mobile phones reduce the cost of communicating with existing social contacts, but do not eliminate frictions in forming new relationships. We report the findings of a two-sided randomized control trial in central Tanzania, centered on the production and distribution of a "Yellow Pages" phone directory with contact information for local enterprises. Enterprises randomly assigned to be listed in the directory receive more business calls, make greater use of mobile money, and are more likely to employ workers. There is evidence of positive spillovers, as both listed and unlisted enterprises in treatment villages experience significant increases in sales relative to a pure control group. Households randomly assigned to receive copies of the directory make greater use their phones for farming, are more likely to rent land and hire labor, have lower rates of crop failure, and sell crops for weakly higher prices. Willingness-to-pay to be listed in future directories is significantly higher for treated enterprises. |
| Keywords: | agriculture; mobile phones; Search costs; Small and medium enterprises; Tanzania; telephone directories |
| JEL: | D83 M37 O13 Q13 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14489&r=all |