Evaluating Credit Guarantee Programs in Developing Countries

The paper discusses the key issues involved in evaluating credit guarantee programs for agricultural and small enterprise lending in developing countries. A review of results of evaluations shows that there is little quantitative information to clearly support the use of guarantee programs to stimulate lending in developing countries

Collateral Substitutes: Effect on Loan Access and Size in the Philippine Informal Credit Markets

Collateral substitutes, such as interlinked contracts and reputation, are econometrically shown to affect loan access and size from informal lenders in the Philippines. Greater access and larger sized loans from fanner lenders were influenced by borrower reputation and land links while from trader lenders by business relations and product links. The specialization of borrowers in farm and non-farm activities and specialization of lenders in farming and trading is observed to influence their preferences for interlinked type collateral substitutes. As a result, systematic differences in loan access and size were found for loans received by different types of borrowers from different types of lenders

Collateral for Loans: When Does it Matter?

This paper assesses the role of collateral by examining if collateral matters for loans, i.e., if the lack of conventional collateral limits access to institutional credit in rural areas. It also discusses conditions under which collateral matters for loans by analyzing the constraints found in using collateral/collateral substitutes in different types of environments for various categories of borrowers. The analyses based on literature survey shows that while collateral matters for improving access to loans and to loans of larger size, these relationships may hold only when specific conditions such as strong markets and legal institutions, and political and social willingness to allow collateral perform its prescribed role are met. Policy recommendations for bankers, governments and donors are drawn from the analysis

Matching of Lenders and Borrowers in Informal Credit Markets: Access to and Choice of Credit Contracts in the Philippines

The paper examines the determinants of access to and choice of contracts that results in the matching of heterogenous informal lenders with borrowers in the Philippines. The regression results suggest a predictable pattern of matching farmer and trader lenders with borrowers based on occupational specialization of lenders and borrower characteristics

Does Membership Homogeneity Matter for Group Based Financial Services? Evidence from The Gambia

This paper examined the effect of membership composition on the components of groups designed to provide financial services, and on the performance of these groups. Regression results based on data from RoSCAs in The Gambia show that gender homogeneity is less likely to affect components of group design than is homogeneity in income generating capacity of members. Membership homogeneity does not directly affect the repayment performance of the members but only indirectly through the components of the group design