Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96512
Authors: 
Weber, Ron
Mußhoff, Oliver
Petrick, Martin
Year of Publication: 
2014
Series/Report no.: 
Diskussionspapiere, Department für Agrarökonomie und Rurale Entwicklung 1404
Abstract: 
Using a unique dataset of a commercial microfinance institution in Madagascar, this paper investigates how the provision of microfinance loans with (in)flexible repayment schedules affects loan delinquencies of agricultural borrowers. Flexible repayment schedules allow a redistribution of principal payments during periods with low agricultural returns to periods when agricultural returns are high. We develop a theoretical framework and apply and estimate an econometric model for the loan repayment behavior of agricultural microborrowers with seasonal and non-seasonal production types. Our results reveal that delinquencies of non-seasonal farmers and seasonal farmers with inflexible repayment schedules are not significantly different from those of non-farmers. Furthermore, we find that seasonal farmers with flexible repayment schedules show significantly higher delinquencies than non-farmers in low delinquency categories, but we also find that this effect disappears in the highest delinquency category.
Subjects: 
Agricultural Credit
Borrowing
Financial Risk
Loan Repayment
Microfinance
Seasonality
JEL: 
G21
G32
Q14
Document Type: 
Working Paper

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