1 option
Microequity and Mutuality: Experimental Evidence on Credit with Performance-Contingent Repayment / Francesco Cordaro, Marcel Fafchamps, Colin Mayer, Muhammad Meki, Simon Quinn, Kate Roll.
- Format:
- Book
- Author/Creator:
- Cordaro, Francesco.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30411.
- NBER working paper series no. w30411
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- We conduct the first field experiment of a performance-contingent microfinance contract. A large food multinational wishes to help micro-distributors in its supply chain with the financing of a productive asset. Working with the firm in Kenya, we compare asset financing under a traditional debt contract to three alternatives: (i) a novel equity-like financing contract, (ii) a hybrid debt-equity contract, and (iii) an index-insurance financing contract. Experimental results reveal large positive impacts from the contractual innovations. These findings demonstrate the economic appeal of microfinance contracts that leverage improved observability of performance to achieve a greater sharing of risk and reward.
- Notes:
- Print version record
- September 2022.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.