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| Casillas, Gabriel; Mitchell, Paul D.. |
| A common problem in agricultural credit markets in developing countries is the coexistence of a competitive market equilibrium interest rate and credit rationing. The literature typically explains the existence of credit rationing in competitive credit markets using adverse selection and moral hazard. Unfortunately these analyses are not consistent with the empirical reality that developing countries deal with in terms of subsidized credit, especially in the agricultural sector. This paper presents an alternative explanation for credit rationing in the agricultural sector in developing countries based on the fact that the requested loans are usually for small amounts, with many farmers making applications. As a result, the costs of operation increase with... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Financial Economics. |
| Ano: 2003 |
URL: http://purl.umn.edu/22199 |
