Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/156679
Authors: 
Römer, Ulf
Weber, Ron
Mußhoff, Oliver
Turvey, Calcum G.
Year of Publication: 
2017
Series/Report no.: 
Diskussionspapiere, Department für Agrarökonomie und Rurale Entwicklung 1702
Abstract: 
The prevention of asymmetric information plays a major role in successful small business lending. The purpose of this research is to determine if small business applicants report their income information correctly when requesting a loan. Therefore, a randomized controlled trial bogus pipeline experiment was set up during a typical cash-flow analysis of a bank for small businesses in the Philippines. Results indicate that loan applicants of the treatment group reported a lower income, an effect which is most pronounced in the lowest income percentile. Moreover, our analyses reveal higher loan delinquencies in the control group.
Subjects: 
Small business finance
Income reporting
Asymmetric information
Bogus pipeline
Randomized controlled trial
Document Type: 
Working Paper

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