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A socio-economic study of the borrowing process: the case of microentrepreneurs in Jordan

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  • Dilip Dutta
  • Ihab Magableh

Abstract

This paper investigates the socio-economic determinants of four stages of borrowing process of the Jordanian microfinance market. The equations and functions corresponding to the stages of the borrowing process are estimated using a sample of 474 microentrepreneurs. The main results are as follow: variables that reflect the repayment ability are the main determinants of credit rationing in the microfinance market; religious beliefs, social responsibilities, availability of local microfinance provides, application costs, level of knowledge about microfinance providers significantly affect the borrowing process of microentrepreneurs. Credit rationing is found to be a problem for some applicants, but not for the majority.

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  • Dilip Dutta & Ihab Magableh, 2006. "A socio-economic study of the borrowing process: the case of microentrepreneurs in Jordan," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1627-1640.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:14:p:1627-1640
    DOI: 10.1080/00036840500427148
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    Cited by:

    1. Kajenthiran. K & Achchuthan. S & Ajanthan. A, 2017. "A Quest for Seeking Microcredit among Youth: Evidence from an Emerging Nation in South Asian Region," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 7(2), pages 1-8.
    2. Jebarajakirthy, Charles & Lobo, Antonio C., 2014. "War affected youth as consumers of microcredit: An application and extension of the Theory of Planned Behaviour," Journal of Retailing and Consumer Services, Elsevier, vol. 21(3), pages 239-248.
    3. Li, Rui & Li, Qinghai & Huang, Shaoan & Zhu, Xi, 2013. "The credit rationing of Chinese rural households and its welfare loss: An investigation based on panel data," China Economic Review, Elsevier, vol. 26(C), pages 17-27.
    4. Shahid Razzaque, 2019. "Choice of Microfinance Contracts and Repayment Rates under Individual Lending: An Artefactual Field Experiment from Pakistan," PIDE-Working Papers 2019:166, Pakistan Institute of Development Economics.
    5. Kumar, D. Suresh, 2009. "Participation in Self-Help Group Activities and its Impacts: Evidence from South India," MPRA Paper 19943, University Library of Munich, Germany, revised 31 Aug 2009.
    6. Kumar, D. Suresh, 2009. "Participation in Self-help Group Activities and Its Impacts: Evidence from South India," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 32(3), pages 1-18, September.
    7. Awal Abdul‐Rahaman & Awudu Abdulai, 2020. "Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 259-280, April.
    8. Durga, A.R. & Chandran, K. & Kumar, D. Suresh, 2018. "Canal Irrigation and Collective Action: The Case of Water User Associations in Southern India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 73(01), January.
    9. Jebarajakirthy, Charles & Lobo, Antonio, 2015. "A study investigating attitudinal perceptions of microcredit services and their relevant drivers in bottom of pyramid market segments," Journal of Retailing and Consumer Services, Elsevier, vol. 23(C), pages 39-48.

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