Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment

Improving rural credit markets requires a good understanding of the root causes of market failures and taking necessary steps to address them. This paper investigates the role of productivity shocks in borrowers repayment choices. Using a framed field experiment that simulated a repeated interaction...

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Main Authors:	Adjognon, Guigonan Serge, Liverpool-Tasie, Lenis Saweda, Shupp, Robert
Format:	Journal Article
Published:	Taylor and Francis 2021
Subjects:	CREDIT AGRICULTURE FINANCIAL INCLUSION RURAL RURAL CREDIT MARKET
Online Access:	http://hdl.handle.net/10986/35278

id	okr-10986-35278
recordtype	oai_dc
spelling	okr-10986-352782021-04-23T14:02:19Z Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment Adjognon, Guigonan Serge Liverpool-Tasie, Lenis Saweda Shupp, Robert CREDIT AGRICULTURE FINANCIAL INCLUSION RURAL RURAL CREDIT MARKET Improving rural credit markets requires a good understanding of the root causes of market failures and taking necessary steps to address them. This paper investigates the role of productivity shocks in borrowers repayment choices. Using a framed field experiment that simulated a repeated interaction in an input credit market, the analysis finds strong evidence that adverse productivity shocks lead to higher default, even when they do not induce negative returns. This relationship is robust to the presence of an information exchange system enforcing dynamic incentives. The findings suggest that recurrent shocks such as those resulting from the harmful effects of climate change could exacerbate failures in rural credit markets, undermining hard-won progress toward rural financial inclusion. 2021-03-17T16:46:25Z 2021-03-17T16:46:25Z 2020-10 Journal Article The Journal of Development Studies 0022-0388 http://hdl.handle.net/10986/35278 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Taylor and Francis Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	CREDIT AGRICULTURE FINANCIAL INCLUSION RURAL RURAL CREDIT MARKET
spellingShingle	CREDIT AGRICULTURE FINANCIAL INCLUSION RURAL RURAL CREDIT MARKET Adjognon, Guigonan Serge Liverpool-Tasie, Lenis Saweda Shupp, Robert Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
description	Improving rural credit markets requires a good understanding of the root causes of market failures and taking necessary steps to address them. This paper investigates the role of productivity shocks in borrowers repayment choices. Using a framed field experiment that simulated a repeated interaction in an input credit market, the analysis finds strong evidence that adverse productivity shocks lead to higher default, even when they do not induce negative returns. This relationship is robust to the presence of an information exchange system enforcing dynamic incentives. The findings suggest that recurrent shocks such as those resulting from the harmful effects of climate change could exacerbate failures in rural credit markets, undermining hard-won progress toward rural financial inclusion.
format	Journal Article
author	Adjognon, Guigonan Serge Liverpool-Tasie, Lenis Saweda Shupp, Robert
author_facet	Adjognon, Guigonan Serge Liverpool-Tasie, Lenis Saweda Shupp, Robert
author_sort	Adjognon, Guigonan Serge
title	Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
title_short	Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
title_full	Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
title_fullStr	Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
title_full_unstemmed	Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment
title_sort	productivity shocks and repayment behavior in rural credit markets : a framed field experiment
publisher	Taylor and Francis
publishDate	2021
url	http://hdl.handle.net/10986/35278
_version_	1764482699781734400

Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment

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