Microfinance default rates in Ghana: Evidence from individual-liability credit contracts

Pollio, Gerald and Obuobie, James (2010) Microfinance default rates in Ghana: Evidence from individual-liability credit contracts. SME Financing in Frontier Markets in Africa (20). pp. 8-14.

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In this paper we present evidence on the factors that affect default probabilities in individual-liability credit contracts. The data are drawn from a for-profit microfinance lender in Ghana. Our sample consists of nearly 1,000 randomly selected loans approved between 2002 and 2007, three quarters of which were repaid; as default is relatively rare in microfinance, borrowers who failed to repay their loans were over-sampled. We study the impact of demographic, business and loan characteristics on default odds. We find that repayment is affected mainly by the number of dependents in the household, years in business, use of proceeds, loan status, and frequency of loan monitoring. In contrast to other studies, we find no connection between the borrower’s marital status, gender or their savings’ behavior and the likelihood of default.

Item Type: Article
Uncontrolled Keywords: sdg 1 - no poverty,sdg 5 - gender equality,sdg 8 - decent work and economic growth ,/dk/atira/pure/sustainabledevelopmentgoals/no_poverty
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: LivePure Connector
Date Deposited: 23 Feb 2021 01:03
Last Modified: 04 Mar 2024 18:02
URI: https://ueaeprints.uea.ac.uk/id/eprint/79301

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