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The probability of taking a loan: Evidence from Indian cities

Author

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  • Saon Ray

    (Indian Council for Research on International Economic Relations (ICRIER))

  • Smita Miglani
  • Sandeep Paul

Abstract

Financial inclusion or access to financial services, is a major development goal for all nations across the globe. Financial inclusion does not concern only 'access', but also the 'use' of financial services. This paper examines the loan taking behavior of individuals based on survey of 844 individuals across five cities in India. Probit regression has been used to ascertain the role of various socio-economic factors in affecting the loan taking behavior. The results indicate that the probability of taking a loan increases with the probability of owning a house and if a person is employed and has a bank account.

Suggested Citation

  • Saon Ray & Smita Miglani & Sandeep Paul, 2019. "The probability of taking a loan: Evidence from Indian cities," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 370, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    • Handle: RePEc:bdc:wpaper:370
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    References listed on IDEAS

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    1. Prina, Silvia, 2015. "Banking the poor via savings accounts: Evidence from a field experiment," Journal of Development Economics, Elsevier, vol. 115(C), pages 16-31.
    2. Meenakshi Rajeev & B. P. Vani, 2017. "Financial Access of the Urban Poor in India," SpringerBriefs in Economics, Springer, number 978-81-322-3712-9, June.
    3. World Bank, 2014. "Global Financial Development Report 2014 : Financial Inclusion," World Bank Publications - Books, The World Bank Group, number 16238.
    4. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    5. Saon Ray & Smita Miglani & Sandeep Paul, 2018. "The growing importance of consumer finance for financial inclusion in India," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 367, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
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