Back to Search
Start Over
Lending policies of informal, formal and semiformal lenders.
- Source :
- Economics of Transition; Jul2007, Vol. 15 Issue 2, p181-209, 29p, 6 Charts
- Publication Year :
- 2007
-
Abstract
- This paper compares lending policies of formal, informal and semiformal lenders with respect to household lending in Vietnam. The analysis suggests that the probability of using formal or semiformal credit increases if borrowers provide collateral, a guarantor and/or borrow for business-related activities. The probability of using informal credit increases for female borrowers. It also appears that the probability of using formal credit increases in household welfare up to a certain threshold, but at a decreasing rate. In addition, the paper discerns the determinants of probability of default across lender types. Default risk of formal credit appears to be strongly affected by formal loan contract terms, e.g., loan interest rate and form of loan repayment, whereas default risk on informal loans is significantly related to the presence of propinquity and other internal characteristics of the borrowing household. Overall, the study raises several important implications for the screening, monitoring and enforcement instruments that may be employed by different types of lenders. [ABSTRACT FROM AUTHOR]
- Subjects :
- FINANCIAL institutions
CREDIT
RISK
HOUSEHOLDS
Subjects
Details
- Language :
- English
- ISSN :
- 09670750
- Volume :
- 15
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Economics of Transition
- Publication Type :
- Academic Journal
- Accession number :
- 24488256
- Full Text :
- https://doi.org/10.1111/j.1468-0351.2007.00283.x