Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/171707 
Erscheinungsjahr: 
2016
Schriftenreihe/Nr.: 
Economics Working Paper Series No. 16/264
Verlag: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Zusammenfassung: 
Interest payments based on income flows are a common feature of informal loans. Such so-called `interlinked loans' can be seen as an insurance against very low disposable incomes, as interest payments are lowest when income turns out to be low. This paper examines whether interlinked loans indeed contain an insurance premium and how those premia are determined. A simple theoretical model predicts that interest rates of interlinked loans increase with income volatility when insurance premia exist. Based on data from a small-scale fishery in India, calculations show that on average, lenders receive 25% of the income, which corresponds to an average interest rate of 49% p.a.. A panel data analysis confirms theoretical predictions that interlinked loans contain an insurance component paid by the borrowers.
Schlagwörter: 
Interlinked loan
Insurance premium
Interest rate
Small-scale fishery
Informal insurance
Informal credit markets
Interlinked contracts
Risk-sharing
India
JEL: 
O16
O17
Q22
H23
Q54
O31
Persistent Identifier der Erstveröffentlichung: 
Dokumentart: 
Working Paper

Datei(en):
Datei
Größe
897.02 kB





Publikationen in EconStor sind urheberrechtlich geschützt.