Publication Type
Working Paper
Version
publishedVersion
Publication Date
2-2012
Abstract
In this paper we examine the effect of increased MFI competition, focusing on its implications for borrower targeting, both in the presence and the absence of double-dipping. In the absence of competition we find that the loans are more likely to go to relatively richer borrowers whenever inequality is not too large, and the technology is sufficiently convex. In the presence of competition, the results depend on whether double-dipping is feasible or not. In case double-dipping is not feasible, we find that the MFIs necessarily target the richer borrowers. Interestingly, it turns out that double-dipping may encourage the MFIs to give loans to the poor, rather than the rich. Further, our analysis raises doubts regarding the benefits of encouraging coordination among the MFIs.
Keywords
Micro-finance competition, motivated MFIs, inequality, borrower targeting, technology
Discipline
Finance
Research Areas
Applied Microeconomics
First Page
1
Last Page
32
Publisher
SMU Economics and Statistics Working Paper Series, No. 05-2012
City or Country
Singapore
Citation
GUHA, Brishti and ROY CHOWDHURY, Prabal.
Micro-finance Competition with Motivated MFIs. (2012). 1-32.
Available at: https://ink.library.smu.edu.sg/soe_research/1327
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.