Access to capital in rural Thailand: an estimated model of formal versus informal credit
By X. Giné. 2005
156 citations recorded by the source corpus.
The aim of this paper is to understand the mechanism underlying access to credit. The author focuses on two important aspects of rural credit markets in Thailand. First, moneylenders and other informal lenders coexist with formal lending institutions such as government or commercial banks, and more recently, micro-lending institutions. Second, potential borrowers presumably face sizable transaction costs obtaining external credit. The author develops and estimates a model based on limited enforcement and transaction costs that provides a unified view of those facts. The results show that the limited ability of banks to enforce contracts, more than transaction costs, is crucial in understanding the observed diversity of lenders.
Subfields: Accounting, Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/46d46d0409f617fcaf7fac0772c844a2010bcb0b
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Citations in the corpus
- The Determinants of Financial Inclusion in Western Africa: Insights from Ghana (2013, background): “The two main fragments of the financial sectors have been captured in the empirical literature as the formal and informal financial markets (Tang, 1995; Chaudhuri & Gupta, 1996; Steel et al., 1997; Bose, 1998; Diagne, 1999; Jain, 1999; Atieno, 2001; Chakrabarty & Chaudhuri, 2001; Aryeetey, 2003; Str”
- Financing from Family and Friends (2016, unknown): “…advantages: Lower monitoring costs or superior information on the part of social lenders reduce moral hazard (Stiglitz, 1990; Varian, 1990; Banerjee et al. ,1994; Jain, 1999), costly state verification (Mookherjee and Png, 1989; Prescott, 1997; Gine, 2011), and adverse selection (Ghatak, 1999).”