Publications [#238123] of Erica Field

Journal Articles

1. Field, E; Pande, R, Repayment frequency and default in microfinance: Evidence from India, Journal of the European Economic Association, vol. 6 no. 2-3 (April, 2008), pp. 501-509, Oxford University Press (OUP), ISSN 1542-4766 [doi]
   (last updated on 2024/11/04)

   Abstract:
   In stark contrast to bank debt contracts, most micro-finance contracts require that repayments start nearly immediately after loan disbursement and occur weekly thereafter. Even though economic theory suggests that a more flexible repayment schedule would benefit clients and potentially improve their repayment capacity, micro-finance practitioners argue that the fiscal discipline imposed by frequent repayment is critical to preventing loan default. In this paper we use data from a field experimept which randomized client assignment to a weekly or monthly repayment schedule and find no significant effect of type of repayment schedule on client delinquency or default. Our findings suggest that, among micro-finance clients who are willing to borrow at either weekly or monthly repayment schedules, a more flexible schedule can significantly lower transaction costs without increasing client default. © 2008 by the European Economic Association.