Informal Credit Markets

It is a well-known feature of rural areas in developing countries that imperfections in intertemporal markets are pervasive. How rural dwellers are affected by this problem and how they succeed in partly surmounting it are therefore issues of the utmost importance in a perspective of rural development and poverty reduction. Recourse to informal mechanisms and institutions, including the interlinking of contracts, is a privileged manner in which these people attempt to mitigate the constraining effect of absent or highly imperfect credit and insurance markets. Such informal mechanisms and their transformation under various circumstances are the object of study in this research project.

First-hand data have been collected by CRED's members in Peru (ongoing), Senegal (completed), and India (completed).