Skip to Main Content
 

Global Search Box

 
 
 
 

Files

File List


osu1127223640.pdf (2.11 MB)

ETD Abstract Container

Abstract Header

Access to credit by hawkers: what is missing? Theory and evidence from India

Joshi, Mukta Gajanan
http://rave.ohiolink.edu/etdc/view?acc_num=osu1127223640

Abstract Details

2005, Doctor of Philosophy, Ohio State University, Agricultural, Environmental and Development Economics.
The dissertation examines degrees of access to financial services by hawkers and determinants of matching patterns observed between various types of borrowers and lenders (informal, semiformal, and formal). Matches occur when endowments of certain characteristics allow borrowers to engage in transactions at low costs and features of their lending technologies allow lenders to identify creditworthiness at low costs. As salient features of hawkers, dimensions of informality act as barriers to accessing formal credit. The dissertation explores the role of a hawker’s endowment of dimensions of formality (documentation, license, accounting, collateral, social capital) as means to signal creditworthiness and the extent to which lending technologies, along a continuum, rely on dimensions of formality in screening and monitoring borrowers and designing and enforcing contracts. A theoretical model predicts assortative matching patterns between borrowers and lenders in reflection of asymmetric information and of their heterogeneity in terms of formality, which results in differences in borrower and lender transaction costs. Hawkers possessing higher endowments of formality-related characteristics match with more formal lenders. The author conducted a survey of hawkers in Mumbai, India. The average age of business is 16 years, and 90 percent of the hawkers never changed location. Their enterprises are small and require little formality. This informality deprives them of low-cost means of signaling creditworthiness to formal lenders. Instead, commercial suppliers are the dominant source of goods on credit, but they do not offer broader arrays of financial services demanded by hawkers. A probit model examines access to loans (influenced by the number of household income earners and type of good sold). A Heckman two-stage regression explains the amount received (influenced by a license to hawk). An ordered logit regression tests for matching. Hawkers with identification documents, stocks of social capital, and a house are more likely to match with institutional sources of credit. Hindu hawkers are more likely to be institutional borrowers and Muslim hawkers prefer commercial suppliers that do not charge interest. Policy implications include the encouragement of innovations in lending technologies, improvements in endowments of characteristics that signal creditworthiness, and less uncertainty in the regulation of hawkers.
Claudio Gonzalez-Vega (Advisor)
196 p.
Credit rationing; Hawkers; Matching; Microfinance; India; Informal sector; Lending technologies; Supplier credit

Recommended Citations

Citations

  • Joshi, M. G. (2005). Access to credit by hawkers: what is missing? Theory and evidence from India [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1127223640

    APA Style (7th edition)

  • Joshi, Mukta. Access to credit by hawkers: what is missing? Theory and evidence from India. 2005. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1127223640.

    MLA Style (8th edition)

  • Joshi, Mukta. "Access to credit by hawkers: what is missing? Theory and evidence from India." Doctoral dissertation, Ohio State University, 2005. http://rave.ohiolink.edu/etdc/view?acc_num=osu1127223640

    Chicago Manual of Style (17th edition)

osu1127223640
1,745
© 2005, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.