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Pré-publication, Document de travail

How far can we go? Determining the optimal loan size in progressive lending

Abstract : The microcredit literature indicates that progressive lending should reduce default rates but that it may lead to over-indebtedness. In this study, we show that progressive lending may be safe over a range of loan sizes, beyond which a rational borrower would indulge in a strategic default. This range of loan sizes may be dependent on borrower characteristics (risk-taking, self-confidence, productivity, interest rates, subsistence needs) as well as the Microfinance Institution's strategy. Many crowdfunding sites are using artificial intelligence to assess borrower risk through social ratings. We are arguing that production functions of the borrowers also need to be added.
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Pré-publication, Document de travail
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https://hal.archives-ouvertes.fr/hal-03001840
Contributeur : Nahla Dhib <>
Soumis le : jeudi 12 novembre 2020 - 15:19:57
Dernière modification le : mardi 1 décembre 2020 - 09:34:23

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how farcan go.pdf
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  • HAL Id : hal-03001840, version 1

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Nahla Dhib, Arvind Ashta. How far can we go? Determining the optimal loan size in progressive lending. 2020. ⟨hal-03001840⟩

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