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The impact of public and private transfers on credit markets has not been sufficiently studied and understanding any spill over effects caused by these transfers may be useful for policy makers. This paper estimates the impact of Conditional Cash Transfers (CCTs) and remittances received by poor households in rural Nicaragua on their decision to request a loan. We find that, on average, CCTs did not affect the request of credit while remittances increased it, controlling for potential endogeneity. We argue the reduction in income risk provided by remittances changes borrowers’ expected marginal returns to a loan and/or their creditworthiness, as perceived by lenders. The successful enforcement of the use of CCTs on long-term investments seems to have avoided externalities on the use of short-term credit these households have access to and their creditworthiness.

Subject(s): International Development

Issue Date: 2009

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/49319

Total Pages: 41

JEL Codes: D14; F22; O15

Series Statement: Selected Paper

612563

Record appears in: Agricultural and Applied Economics Association (AAEA) > 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin





Autor: Hernandez, Emilio ; Sam, Abdoul G. ; Gonzalez-Vega, Claudio ; Chen, Joyce J.

Fuente: http://ageconsearch.umn.edu/record/49319?ln=en







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