Borrowing Amongst Friends: The Economics of Informal Credit in Rural China

This paper investigates the economic significance of informal borrowing between friends and relatives in rural China. Guided by an economic model of household-production interactions, we provide results from a survey of over 1,500 households including GLM and Logistic regression results. We find evidence of a ‘small farm bias’ in the use of informal credit, but we cannot generalize this to credit rationing as a matter of course. In part we believe that a preference for informal borrowing is related to some forms of credit rationing, spillover effects and collateral as some literature suggests, but our results suggest that by no means are these mutually exclusive or exhaustive.


Issue Date:
2009
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/51658
Total Pages:
23
Note:
The research was supported by National Natural Science Fund of China with ratification number 70873096.
Series Statement:
Contributed Paper
756




 Record created 2017-04-01, last modified 2017-05-27

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