Asymmetric group loans, non-assortative matching and adverse selection

S. Gangopadhyay; B.W. Lensink

doi:10.1016/j.econlet.2014.05.010

Asymmetric group loans, non-assortative matching and adverse selection

S. Gangopadhyay, B.W. Lensink

Development Economics

Research output: Contribution to journal › Article › Academic › peer-review

1 Citation (Scopus)

Abstract

This paper shows that an asymmetric group debt contract, where one borrower co-signs for another, but not vice versa, leads to heterogeneous matching. The analysis suggests that micro finance organizations can achieve the first best by offering asymmetric group contracts. (C) 2014 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	185-187
Journal	Economics Letters
Volume	124
Issue number	2
DOIs	https://doi.org/10.1016/j.econlet.2014.05.010
Publication status	Published - 2014

Keywords

joint liability

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10.1016/j.econlet.2014.05.010

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title = "Asymmetric group loans, non-assortative matching and adverse selection",

abstract = "This paper shows that an asymmetric group debt contract, where one borrower co-signs for another, but not vice versa, leads to heterogeneous matching. The analysis suggests that micro finance organizations can achieve the first best by offering asymmetric group contracts. (C) 2014 Elsevier B.V. All rights reserved.",

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AB - This paper shows that an asymmetric group debt contract, where one borrower co-signs for another, but not vice versa, leads to heterogeneous matching. The analysis suggests that micro finance organizations can achieve the first best by offering asymmetric group contracts. (C) 2014 Elsevier B.V. All rights reserved.

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DO - 10.1016/j.econlet.2014.05.010

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JO - Economics Letters

JF - Economics Letters

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Asymmetric group loans, non-assortative matching and adverse selection

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Keywords

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