Header menu link for other important links
Does multiple borrowing necessarily mean over-borrowing?
, Viswanath Pingali, Santadarshan Sadhu
Published in Practical Action Publishing
Volume: 27
Issue: 2
Pages: 132 - 141
Using a survey dataset collected from Andhra Pradesh, India, we test if multiple borrowing is equivalent to over-borrowing. Results suggest that over-borrowing and multiple loans are not necessarily synonymous. As the number of credit agencies in a village increases, the average loan burden of villagers does not increase. We also find evidence of substitution of formal sources of credit for informal ones with increased presence of formal credit institutions. Such substitution is greater with addition of microcredit institutions than with other formal lending agencies. Our results indicate that joint liability setup seems to ensure that individuals at a greater risk of non-repayment are discouraged from obtaining microcredit.
About the journal
JournalEnterprise Development and Microfinance
PublisherPractical Action Publishing
Open AccessNo