%0 Journal Article
%T Predicting Multiple-Borrowing Default among Microfinance Clients
%A Kanish Debnath
%A Priyanka Roy
%J Theoretical Economics Letters
%P 1772-1792
%@ 2162-2086
%D 2018
%I Scientific Research Publishing
%R 10.4236/tel.2018.810116
%X In order to control over-indebtedness that often
leads to capacity failure, the Reserve Bank of India recently issued directives
for Micro Finance Institutions to restrict multiple loans to borrowers. These
institutions are also required to regularly share their current borrowersĄŻ loan
records with a Credit Information Company. We argue here that ex-post loan
record verification is inefficient and inadequate considering the
socio-economic and informational asymmetries in micro-credit markets. Instead,
we reason, household characteristics can predict multiple-borrowing behaviour.
Our empirical analysis shows that this is true to some extent. We dwell on
policy implications and ways to improve our model.
%K Microfinance
%K Multiple-Borrowing
%K Credit Default
%K Regulation
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=85364