Development Policy Review
Employing data for 34,255 loans made by the Bangladesh Rural Advancement Committee (BRAC) to 12,455 repeat borrowers during the 2002-6 period, this article examines the relationship between borrowers’ asset holdings and microloan repayment. Estimating a series of binomial probit specifications, it finds a positive relationship between land ownership and loan repayment; however, taken collectively, ownership of non-land assets diminishes the likelihood of repayment. Influences of specific assets on repayment probabilities vary across asset types: ownership of land, corrugated tin houses, vans and rickshaws increases the likelihood of repayment, while ownership of sewing machines, televisions, radios and bicycles corresponds with a decreased repayment probability.
White, R., & Alam, S. A. (2013). Asset Ownership and the Probability of Repayment: An Examination of Microcredit Data from Bangladesh. Development Policy Review, 31 (3) Retrieved from https://poetcommons.whittier.edu/econ/26