IDEAS home Printed from https://ideas.repec.org/a/anr/refeco/v14y2022p1-20.html
   My bibliography  Save this article

The Village Money Market Revealed: Financial Access and Credit Chain Links Between Formal and Informal Sectors

Author

Listed:
  • Parit Sripakdeevong

    (Department of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts, USA)

  • Robert M. Townsend

    (Department of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts, USA)

Abstract

An all-or-nothing view of financial access leading to overly simplistic policy recommendations has been largely overturned in the data. Heterogeneity and explicit obstacles to trade are key aspects that need to be incorporated into models when looking at intermediate outcomes in the data. Networks in particular can amplify or work against policy interventions and do so in different directions for different groups at the same time. Work on village money markets allows us to better understand how these networks function, and how and why they can change with policy interventions. Nevertheless, though village economies are as sophisticated as those in New York financial markets, both suffer from familiar problems. One is reliance on relationships that segment markets and limit more universal benefits. A second problem is market contagion. Policy interventions facilitating financial access and the functioning of markets need to be guided by this stricter yet more realistic view.

Suggested Citation

  • Parit Sripakdeevong & Robert M. Townsend, 2022. "The Village Money Market Revealed: Financial Access and Credit Chain Links Between Formal and Informal Sectors," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 1-20, November.
    • Handle: RePEc:anr:refeco:v:14:y:2022:p:1-20
    DOI: 10.1146/annurev-financial-012820-034126
    as

    Download full text from publisher

    File URL: https://doi.org/10.1146/annurev-financial-012820-034126
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    File URL: https://libkey.io/10.1146/annurev-financial-012820-034126?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nartey Menzo, Benjamin Prince & Mogre, Diana & Asuamah Yeboah, Samuel, 2024. "Beyond Income: The Complexities of Credit Risk in Developing Countries," MPRA Paper 122364, University Library of Munich, Germany, revised 20 Sep 2024.

    More about this item

    Keywords

    credit; credit chains; financial access; formal and informal sectors; insurance; networks; village money market;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D60 - Microeconomics - - Welfare Economics - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:refeco:v:14:y:2022:p:1-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.