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Demand for Microcredit by Indonesian women

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  • Johar, Meliyanni
  • Rammohan, Anu

Abstract

The poverty alleviating benefits of gender-targeted microcredit programs has successfully been demonstrated in South Asia. In this paper, we examine the demand for credit by Indonesian women, in the absence of such a targeted microcredit program. We argue that when credit markets are imperfect and there are informational asymmetries, it is important to take into account the possibility that individuals may have no knowledge of or be unwilling to borrow due to constraints. Our results show that selection bias cannot be neglected, and ignoring double-selection may lead to an underestimation of loan demand by nearly one hundred percent. We find that given knowledge of credit facilities, women in female-headed households, and better networked women are more likely to be.

Suggested Citation

  • Johar, Meliyanni & Rammohan, Anu, 2006. "Demand for Microcredit by Indonesian women," Working Papers 2006-03, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2123/7631
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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.

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    Keywords

    Indonesia; microcredit; women;
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