IDEAS home Printed from https://ideas.repec.org/a/taf/pocoec/v26y2014i3p415-435.html
   My bibliography  Save this article

Informal credit institutions in transition countries: a study of urban money lenders in post-communist Uzbekistan

Author

Listed:
  • Kobil Ruziev
  • Peter Midmore

Abstract

Research on informal financial institutions in transition economies is scant. This study investigates behaviour of urban money lenders in Uzbekistan. Money lending in Uzbekistan is a relatively new business which emerged mostly in response to targeted demand from fellow entrepreneurs during transition. We find that their lending behaviour is more stringent than suggested by previous studies of rural money lenders. They always require collateral, do not engage with the poor and avoid lending for consumption purposes. Their lending is short-term and targeted on specific business opportunities which enjoy healthy cash flows and offer quick returns. They have limited outreach from serving networks of connections within small geographical localities. Since they rely exclusively on their own resources for loanable funds, they often have to ration their loans. They actively use all available information and instruments to reduce default risks. Although borrowers live in closer geographical proximity to lenders in urban areas, they are also engaged in various heterogeneous activities and are more self-reliant with respect to the local community, which reduces the accuracy of money lenders' assessment of the character of borrowers as well as of their ability to repay.

Suggested Citation

  • Kobil Ruziev & Peter Midmore, 2014. "Informal credit institutions in transition countries: a study of urban money lenders in post-communist Uzbekistan," Post-Communist Economies, Taylor & Francis Journals, vol. 26(3), pages 415-435, September.
  • Handle: RePEc:taf:pocoec:v:26:y:2014:i:3:p:415-435
    DOI: 10.1080/14631377.2014.937107
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/14631377.2014.937107
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/14631377.2014.937107?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.

    References listed on IDEAS

    as
    1. Kobil Ruziev & Peter Midmore, 2015. "Connectedness and SME Financing in Post-Communist Economies: Evidence from Uzbekistan," Journal of Development Studies, Taylor & Francis Journals, vol. 51(5), pages 586-602, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Uduakobong Inyang, 2022. "Risks to credit access in a developing economy:Focus on household characteristics and the choice of credit in the Niger Delta Region of Nigeria," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 228-240, March.
    2. Pelkmans, Mathijs & Umetbaeva, Damira, 2018. "Moneylending and moral reasoning on the capitalist frontier in Kyrgyzstan," LSE Research Online Documents on Economics 84409, London School of Economics and Political Science, LSE Library.
    3. Dvouletý Ondřej & Čadil Jan & Mirošník Karel, 2019. "Do Firms Supported by Credit Guarantee Schemes Report Better Financial Results 2 Years After the End of Intervention?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(1), pages 1-20, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuting Li & Tong Chen & Baogui Xin, 2016. "Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products," Sustainability, MDPI, vol. 8(5), pages 1-17, April.
    2. Kobil Ruziev & Don Webber, 2017. "SMEs access to formal finance in post-communist economies: Do institutional structure and political connectedness matter?," Working Papers 20171701, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    3. Mirgul Nizaeva & Ali Coskun, 2019. "Investigating the Relationship Between Financial Constraint and Growth of SMEs in South Eastern Europe," SAGE Open, , vol. 9(3), pages 21582440198, September.
    4. Kobil Ruziev, 2017. "Political connectedness and formal finance in transition economies," IZA World of Labor, Institute of Labor Economics (IZA), pages 398-398, November.

    More about this item

    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:taf:pocoec:v:26:y:2014:i:3:p:415-435. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CPCE20 .

    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.