Using data from a leading Italian microfinance provider we investigate the effect of kinship relations between borrowers and cosigners on loan defaults. We address causality issues using an instrumental variable built on the exogenous rule imposed by the lender that requires personal guarantees for loans exceeding € 5000. Results show that the presence of closely related cosigners tends to reduce defaults. We find that this is the result of a possible combined effect of both stronger solidarity and more effective psychological pressure exerted by relatives compared to other categories of cosigners.
The role of borrower-cosigner kinship relations on loan default: evidence from Italy
dalla Pellegrina, Lucia
;
2016
Abstract
Using data from a leading Italian microfinance provider we investigate the effect of kinship relations between borrowers and cosigners on loan defaults. We address causality issues using an instrumental variable built on the exogenous rule imposed by the lender that requires personal guarantees for loans exceeding € 5000. Results show that the presence of closely related cosigners tends to reduce defaults. We find that this is the result of a possible combined effect of both stronger solidarity and more effective psychological pressure exerted by relatives compared to other categories of cosigners.
File in questo prodotto:
| File | Dimensione | Formato | |
|---|---|---|---|
|
article.pdf
non disponibili
Descrizione: article
Tipologia:
Pdf editoriale (Publisher's layout)
Licenza:
NON PUBBLICO - Accesso privato/ristretto
Dimensione
527.2 kB
Formato
Adobe PDF
|
527.2 kB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
