2026-09-19T23:50:25Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/1139492022-01-13T07:54:52Zcom_1721.1_7582com_1721.1_7581col_1721.1_131023
Daron Acemoglu and Jonathan Parker.
Green, Daniel (Daniel Weiss)
Liu, Ernest Siyuan
Massachusetts Institute of Technology. Department of Economics.
Massachusetts Institute of Technology. Department of Economics
Sloan School of Management
2018-03-02T22:20:12Z
2018-03-02T22:20:12Z
2017
2017
http://hdl.handle.net/1721.1/113949
1023434134
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2017.
Thesis: S.M. in Economics, Massachusetts Institute of Technology, Department of Economics, 2017.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 51-52).
There is little evidence that the expansion of microfinance has reduced poverty, but is instead increasingly associated with problematic multiple borrowing at high interest rates and high levels of debt and default. We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.
by Daniel Green and Ernest Siyuan Liu.
S.M. in Management Research
S.M. in Economics
52 pages
eng
Massachusetts Institute of Technology
MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.
http://dspace.mit.edu/handle/1721.1/7582
Sloan School of Management.
Economics.
Growing Pains in financial development : institutional weakness and investment efficiency
Institutional weakness and investment efficiency
Thesis
application/pdf
false
Publication
unknown
unknown
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<Abstract>There is little evidence that the expansion of microfinance has reduced poverty, but is instead increasingly associated with problematic multiple borrowing at high interest rates and high levels of debt and default. We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.</Abstract>
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