The use of village agents in rural credit delivery

The use of village agents in rural credit delivery

Using a simple principal-agent model this article examines the incentive problems that arise when a formal financial institution (such as a rural bank) utilises a member of the rural community to act as an agent in screening potential borrowers and collecting repayment. Optimal compensation schemes...

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Veröffentlicht in:The Journal of development studies 1996-12, Vol.33 (2), p.188-209
1. Verfasser: Fuentes, Gabriel A.
Format: Artikel
Sprache:eng
Schlagworte:
Agents
Agricultural policy
Bangladesh
Bank operations
Banking
Community Involvement
Comparison
Credit
Financial institutions
Foreign Affairs
Indonesia
Loans
Mathematical models
Residents
Rural areas
Rural Communities
Rural credit
Rural Development
Rural economics
Rural Government
Savings and loan associations
Screening
Small farmers
Villages
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Beschreibung
Zusammenfassung:Using a simple principal-agent model this article examines the incentive problems that arise when a formal financial institution (such as a rural bank) utilises a member of the rural community to act as an agent in screening potential borrowers and collecting repayment. Optimal compensation schemes are derived for the agent and their implications are discussed. In addition, I show that the norms and rules that govern village life may aid the financial institution by helping to constrain possible strategic behaviour by the agent.
ISSN:0022-0388
1743-9140
DOI:10.1080/00220389608422462