Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185246 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11786
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using a unique dataset covering the borrowing behaviour of over a thousand borrowers, we study the unlicensed moneylending market in Singapore. In this market, borrowers search for lenders, and lenders decide how much profit to extract from borrowers. Lenders harass borrowers into compliance. We observe that different lenders apply different markups on different borrowers. Higher markups discourage borrowers from repeatedly borrowing from a particular lender. Increased enforcement specifically targeted at reducing the number of lenders in this market will increase markups, but will not deter borrowers from becoming recurrent borrowers because they have fewer lenders to choose from.
Subjects: 
illegal lending
enforcement
markup
JEL: 
K42
Document Type: 
Working Paper

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