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Micro-credit Programs and Land Distribution: A Note

Author

Listed:
  • Munirul Haque Nabin

    (Deakin Business School, Deakin University, Australia)

  • Gautam Bose

    (School of Economics, University of New South Wales, Australia)

Abstract

"Micro-credit" has come to refer to a popular extension strategy -usually in the agricultural sector -whereby a government or NGO extends credit at favorable rates to poorer borrowers, with repayment being supported by some kind of mortgage on the borrower's social capital. In the commonest case, eligibility is determined by the borrower''s wealth, as indexed by his/her landholding. This note shows that, with an imperfect land market, the response to such a program will be to fragment landholdings which are smaller than a certain threshold, while larger holdings remain unaffected. Thus the pattern of landholding will tend to become more polarized.

Suggested Citation

  • Munirul Haque Nabin & Gautam Bose, 2006. "Micro-credit Programs and Land Distribution: A Note," Economics Bulletin, AccessEcon, vol. 15(9), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-06o10011
    as

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    References listed on IDEAS

    as
    1. Heston, Alan & Kumar, Dharma, 1983. "The persistence of land fragmentation in peasant agriculture: An analysis of South Asian cases," Explorations in Economic History, Elsevier, vol. 20(2), pages 199-220, April.
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    More about this item

    Keywords

    land fragmentation and polarization;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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