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Identifier to cite or link to this item: https://hdl.handle.net/10086/30932

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Title
Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries
Creator
Creator Name
Maitra, Pushkar Maitra, Pushkar
Affiliation
Affiliation Name
Monash University
Creator Name
Mitra, Sandip Mitra, Sandip
Affiliation
Affiliation Name
Indian Statistical Institute
Creator Name
Mookherjee, Dilip Mookherjee, Dilip
Affiliation
Affiliation Name
Boston University
Creator Name
Visaria, Sujata Visaria, Sujata
Affiliation
Affiliation Name
Hong Kong University of Science and Technology
Editor
Contributor Name
Hitotsubashi Institute for Advanced Study, Hitotsubashi University
Key Word
Targeting
Intermediation
Decentralization
Community Driven Development
Agricultural Credit
Networks
JEL
H42
I38
O13
O16
O17
Abstract
We compare two different methods of appointing a local commission agent as an intermediary for a credit program. In the Trader-Agent Intermediated Lending Scheme (TRAIL), the agent was a randomly selected established private trader, while in the Gram Panchayat-Agent Intermediated-Lending Scheme (GRAIL), he was randomly chosen from nominations by the elected village council. More TRAIL loans were taken up, but repayment rates were similar, and TRAIL loans had larger average impacts on borrowers’ farm incomes. The majority of this difference in impacts is due to differences in treatment effects conditional on farmer productivity, rather than differences in borrower selection patterns. The findings can be explained by a model where TRAIL agents increased their middleman profits by helping more able treated borrowers reduce their unit costs and increase output. In contrast, for political reasons GRAIL agents monitored the less able treated borrowers and reduced their default risk.
Publisher
Hitotsubashi Institute for Advanced Study, Hitotsubashi University
Issued Date
2020-01
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion paper series ; No. HIAS-E-94
Number of Pages
44
Sponsorship
Funding was provided by the Australian Agency for International Development, the International Growth Centre,United States Agency for International Development, the Hong Kong Research Grants Council (GRF 16503014) and the HKUST Institute for Emerging Market Studies (IEMS15BM05).
Appears in Collections
Discussion paper series / Hitotsubashi Institute for Advanced Study, Hitotsubashi University
URL
https://hdl.handle.net/10086/30932