LEARNING BY ASSOCIATION: MICRO CREDIT IN CHIAPAS, MEXICO |
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| Authors: | GUSTAVO A BARBOZA HUMBERTO BARRETO |
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| Institution: | Barboza:;Assistant Professor of International Business and Economics, Walker School of Business, Mercyhurst College, Erie, PA 16546. Phone 1-814-824-2562, Fax 1-814-824-3641, E-mail Barreto:;DeVore Professor of Economics, Department of Economics, Wabash College, Crawfordsville, IN. Phone 1-765-361-6315, Fax 1-765-361-6277, E-mail |
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| Abstract: | Micro credit programs provide institutional arrangements for low-income people to transit from nonmarket to market-oriented settings. This article develops a data set of payment records to determine micro credit participants' behavior on repayment performance. The findings shed new light strongly supporting micro credit as a feasible alternative to successfully provide financial resources to the poor, when controlling for asymmetric information. The empirical evidence indicates that learning by association through peer mentoring is a significant determinant in explaining high repayment rates, whereas peer monitoring is not. (JEL O1 , O17 , L31 , J15 ) |
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