Delegated Monitoring and Moral Hazard in Underdeveloped Credit Markets

2007 ◽  
Author(s):  
Shubhashis Gangopadhyay ◽  
Robert Lensink
Keyword(s):  
Moral Hazard ◽  
Credit Markets ◽  
Delegated Monitoring

scholarly journals Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending

2013 ◽  
Vol 5 (4) ◽  
pp. 256-282 ◽  
Author(s):  
Will Dobbie ◽  
Paige Marta Skiba
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Regression Discontinuity ◽  
Credit Markets ◽  
Consumer Credit ◽  
Probability Of Default ◽  
Information Asymmetries ◽  
Payday Lending ◽  
Loan Market ◽  
Payday Loans

Information asymmetries are prominent in theory but difficult to estimate. This paper exploits discontinuities in loan eligibility to test for moral hazard and adverse selection in the payday loan market. Regression discontinuity and regression kink approaches suggest that payday borrowers are less likely to default on larger loans. A $50 larger payday loan leads to a 17 to 33 percent drop in the probability of default. Conversely, there is economically and statistically significant adverse selection into larger payday loans when loan eligibility is held constant. Payday borrowers who choose a $50 larger loan are 16 to 47 percent more likely to default. (JEL D14, D82, G21)

scholarly journals Is There Moral Hazard in Islamic Rural Bank Financing?

2019 ◽  
Vol 12 (2) ◽  
pp. 119
Author(s):  
Adelia Oktarina ◽  
Idqan Fahmi ◽  
Irfan Syauqi Beik
Keyword(s):  
Logistic Regression ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Credit Markets ◽  
Credit Market ◽  
Regression Method ◽  
Factors Influencing ◽  
Bank Financing ◽  
Logistic Regression Method ◽  
Business Conditions

<em>The credit market was identical to asymmetric information in it, both conventional and sharia credit markets. One of the forms of this asymmetric information was moral hazard. This study aimed to identify the existence of moral hazard in credit market (financing) by comparing the customer conditions in islamic rural bank and conventional rural bank. This study also intended to identify the factors influencing the moral hazard. The analysis used was logistic regression method. The result showed that islamic rural bank had a bigger potential to experience moral hazard compared to the conventional customers. Generally, the factors which influence the moral hazard such as age, business conditions, amount of financing, length of financing, and type of bank.</em>

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