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Language
English (en)
Date of Award
5-1-2015
Author's Department
International and Area Studies
Degree Name
Bachelor of Arts (A.B.)
Restricted/Unrestricted
Restricted
Abstract
In this thesis, I analyze the interconnectedness between formal and informal credit markets. I investigate the reasons for the choosing an informal loan from friends and relatives over a formal bank loan in rural China. I also explore the informal loan contract characteristics in relation to social network, information about the rural bank and loan size. My results show that people choose informal loans because they lack the information about bank’s products and services. My findings also indicate there is a limit to informal loan size: informal loans become more formal as they grow in size. Therefore, there is inefficiency in China’s rural credit market since borrowing informally is not a perfect substitute for formal loans.
DOI
https://doi.org/10.7936/v43g-ek43
Mentor
Bruce Peterson
Recommended Citation
Wang, Betty Xiao, "Rural Credit Markets in China: Informal Loans and Information Asymmetry" (2015). Senior Honors Papers / Undergraduate Theses. 176.
The definitive version is available at https://doi.org/10.7936/v43g-ek43