The Regulation of Prosocial Lending: Are Loan Ceilings Effective?
| Autor: | Cozarenco, Anastasia, Szafarz, Ariane |
|---|---|
| Jazyk: | francouzština |
| Rok vydání: | 2020 |
| Předmět: |
G28
I38 Microcredit M13 L31 O52 regulation New Firms Startups Europe [Economywide Country Studies] altruism Government Policy and Regulation [Financial Institutions and Services] microfinance Economie Banks Other Depository Institutions Micro Finance Institutions Mortgages Nonprofit Institutions NGOs G21 Government Programs Provision and Effects of Welfare Programs [Welfare and Poverty] C25 Economics of Regulation L51 Discrete Regression and Qualitative Choice Models [Single Equation Models Single Variables] loan ceiling mission drift |
| Zdroj: | Working Papers CEB; 20-012 |
| Popis: | Regulatory loan ceilings are commonly found in the prosocial lending sector, yet they can have unintended perverse effects. By mitigating the risk of adverse selection, loan caps catalyze co-financing arrangements between subsidized lenders and commercial banks. These arrangements can, in turn, crowd out the most vulnerable borrowers, i.e. those typically targeted by regulators. To assess this claim, we proceed in two steps. First, we build a theoretical model. Second, we test it, drawing on a rich hand-collected dataset on the clientele of an unregulated French microcredit provider that turned into a regulated institution following a shock affecting its funding sources. Using a difference-in-differences linear probability model with propensity score matching, we empirically confirm the theoretical prediction that the imposition of a loan ceiling will lead to missiondrift. info:eu-repo/semantics/published |
| Databáze: | OpenAIRE |
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