Publication Type
Journal Article
Version
acceptedVersion
Publication Date
10-2019
Abstract
Why do poor farmers not take up microcredit loans, even when the terms are designed to be pro-poor? Fieldwork in a village in China’s Guizhou province revealed a puzzle: although the county government had designed a loan program that was intended to be unusually pro-poor, only three of the 349 eligible households had successfully applied. This article analyzes three potential hypotheses: farmer failure (risk aversion or financial illiteracy), market failure (lack of viable or stable market opportunities), and institutional failure (structural or institutional barriers precluding taking up loans). Based on evidence from intensive interviews, we reject the first hypothesis, and conclude that the persistence of structural and institutional barriers can preclude the poor from taking up loans. However, even if these barriers are overcome, we suggest that microcredit loans should be integrated into a larger development policy designed to stimulate the market and market opportunities in which the poor can participate.
Keywords
microfinance, local government, rural China, poverty
Discipline
Agribusiness | Asian Studies | Political Science | Social Welfare
Research Areas
Political Science
Publication
Modern China
First Page
1
Last Page
27
ISSN
0097-7004
Identifier
10.1177/0097700419878800
Publisher
SAGE Publications (UK and US)
Citation
TAN, Deborah Shu Yi, TAN, Track Tze Tuan, LING, Shao Tong, & DONALDSON, John A..(2019). Obstacles to accessing pro-poor microcredit programs in China: Evidence from Penggan Village, Guizhou. Modern China, , 1-27.
Available at: https://ink.library.smu.edu.sg/soss_research/3121
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.
Additional URL
https://doi.org/10.1177/0097700419878800
Included in
Agribusiness Commons, Asian Studies Commons, Political Science Commons, Social Welfare Commons