Kinship and Financial Networks, Formal Financial Access, and Risk Reduction
By Cynthia Kinnan, Robert M. Townsend. 2012
241 citations recorded by the source corpus.
Kinship networks are beneficial for smoothing consumption and investment, but the channels are not well understood. We study the financing devices used for consumption and investment by Thai households. Households that are connected to banks achieve significantly better consumption smoothing than unconnected households; indirect connections via inter-household borrowing are as effective as direct borrowing. Investment appears to be facilitated by kinship: households with kin in the village display reduced sensitivity of investment to income, while connections to banks do not significantly reduce sensitivity. Kin may act as "implicit collateral," permitting borrowing that would violate repayment constraints in its absence.
Subfields: Accounting, Economics and Econometrics, Soil Science
View Paper: https://www.semanticscholar.org/paper/0d6abbc9c9326089f576ab28cfdb723b2c6e3005
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Citations in the corpus
- From Poverty to Disaster and Back: a Review of the Literature (2020, background): “…vulnerability suggests that financial inclusion, especially targeting poor people through savings and borrowing products designed for their needs, could be a powerful risk reduction strategy (Morduch 1995; Kinnan and Townsend 2012; Demirguc-Kunt et al. 2018; Moore et al. 2019; Erman et al. 2019).”
- The Diffusion of Microfinance (2013, unknown): “In addition, how varied the degrees (number of links) are across individuals in a network can affect diffusion properties, since highly connected nodes can serve as “hubs” that play important roles in facilitating diffusion (see Valente and Davis (1999), Pastor-Satorras and Vespignani (2000), Newman”