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Ashok Kotwal
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
A symposium on Piketty: Introduction
Posted on: 15 Jun 2015
Thomas Piketty’s book on ´Capital in the Twenty First Century’ has made waves. The f ... read on »
Emerging challenges: Economic and social
Posted on: 06 Aug 2014
To mark the second anniversary of I4I in July 2014, we invited two eminent scholars – Abhi ... read on »

Tag: credit

A five-minute loan to unlock micro-entrepreneurship in India
Vibhor Goyal , Niloufer Memon , Varad Pande
Posted on: 11 Jan 2017
Topics:   Finance


Micro-entrepreneurs are grossly underserved by traditional lenders, as they typically do not have collateral or credit histories to make them creditworthy. In this article, Pande, Memon and Goyal of Dalberg Global Development Advisors, describe how digital infrastructure created by ‘India Stack’ can help provide paperless, presence-less, and cashless credit to micro-entrepreneurs, in a way that is sustainable for lenders.
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Demonetisation and agricultural markets
Nidhi Aggarwal , Sudha Narayanan
Posted on: 30 Nov 2016

In this article, Aggarwal and Narayanan contend that demonetisation alone cannot turn agricultural markets cashless. Such a shift would require sustained and focussed effort to expand the reach of formal institutions, especially for credit and storage.
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Kisan Credit Card programme: Expanded access to credit or expansion of credit?
Somdeep Chatterjee
Posted on: 03 Nov 2016
Topics:   Finance , Agriculture


Kisan Credit Card programme - a key reform in agricultural lending in India - has been operational for almost 20 years now. However, there is little empirical evidence of its impact on intended beneficiaries. This column finds that the programme has had significant positive impact on agricultural production and technology adoption. It is likely that the channel is enhanced borrowing ability of the already unconstrained, rather than expanded access to credit.
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Land and financial misallocation in India
Gilles Duranton , Ejaz Ghani , Arti Grover Goswami , William Kerr
Posted on: 20 Jul 2016

Optimising the allocation of factors of production – land, capital and labour - improves productivity. In India, where evidence suggests land is severely misallocated to inefficient manufacturing firms, access to financing is disproportionately tied to access to land. This column examines the link between the misallocation of land and access to capital through financial markets. A very strong positive correlation emerges between the two, consistent with the fact that land and buildings can provide strong collateral support for accessing finance from the credit market.
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Socially disadvantaged groups and microfinance in India
Jean-Marie Baland , Rohini Somanathan , Lore Vandewalle
Posted on: 16 May 2016

The benefits of microfinance are in the details. This column takes a look at lending by commercial banks in India to self-help groups – smaller, informal community-based groups – as a new and successful microfinance initiative. Different ways of thinking about getting credit to the poorest and most marginalised in society can work, but only if the institutions are properly geared up for their customers
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Regulating land markets: The colonial inheritance
Anand Swamy
Posted on: 10 Feb 2016
Topics:   Land


State intervention in markets is usually thought of as a post-independence phenomenon. However, this column demonstrates that extensive State intervention in land and credit transactions can be traced back to policies adopted by the British Raj in India, beginning in the late 19th century.
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Transforming Indian agriculture: The role of credit policy
Amartya Lahiri , Dilip Mookherjee
Posted on: 14 Dec 2015
Topics:   Finance , Agriculture


Despite various policy attempts at priority sector lending to poor farmers, very little progress has been made on the ground, suggesting problems in the design and implementation of these policies. In this article, Amartya Lahiri and Dilip Mookherjee and explore where the problem really lies and what can be done to address the issues.
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Are banks responsive to credit demand shocks in rural India?
Sankar De , Siddharth Vij
Posted on: 05 Oct 2015
Topics:   Finance


The output of Kharif crops is estimated to decrease by about 2% this year due to deficient monsoon rains in some Indian states. How responsive are commercial banks to a credit demand shock in rural India? Analysing data on rainfall and agricultural credit during 1993-2010, this column finds that banks increase the supply of agricultural credit to farmers following a drought, but that the additional credit is directed towards existing customers.
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Can microcredit improve food security among the rural poor?
Asad Islam , Chandana Maitra , Debayan Pakrashi , Russell Smyth
Posted on: 28 Sep 2015

A core objective of microcredit in Bangladesh is to make the rural poor more food secure. To what extent has this been achieved? Analysing household data from Bangladesh, this column finds that participants of microcredit programmes are more food secure, with improved calorie availability, reduced child stunting and better maternal nutritional status. However, programme participation in itself does not improve dietary diversity.
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Are self-help groups helpful?
Upamanyu Datta
Posted on: 11 Sep 2015

While a lot of funding goes towards community-driven development projects, rigorous evidence on their socioeconomic impact is limited. This column evaluates the impact of JEEViKA – a rural livelihoods project in Bihar that seeks to empower marginalised women by organising them into self-help groups. It also highlights the importance of understanding how these initiatives work, and the challenges involved in evaluating their impact.
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Financial inclusion for agricultural growth: An alternative approach
Pushkar Maitra , Sandip Mitra , Dilip Mookherjee , Alberto Motta , Sujata Visaria
Posted on: 08 Dec 2014

Traditional, group-based microcredit has had limited success at enabling farmers to expand the cultivation of risky but profitable cash crops. Evidence suggests that this is mainly because of its mechanisms for borrower selection and enforcement of repayment. This column proposes a new approach that leverages local intermediaries and aligns their incentives with farmer profits, to generate better outcomes for agricultural production and incomes.
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Financial inclusion of women: Myth or reality?
Deepti KC , Mudita Tiwari
Posted on: 04 Jul 2014
Topics:   Finance , Gender


Research indicates that initiatives targeted at financial inclusion of women have had limited success. This column contends that limited formal ownership of material assets by women and a lack of understanding of their socio-economic and cultural constraints are key explanations. It recommends innovative measures to promote financial inclusion and entrepreneurship among women.
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Corporate debt market in India: Issues and challenges
Vaibhav Anand , Rajeswari Sengupta
Posted on: 19 May 2014
Topics:   Finance
Tags:   credit


While it is true that the Indian corporate debt market has transformed itself into a much more vibrant trading field for debt instruments from the elementary market that it was about a decade ago, there is still a long way to go. This column systematically lays down the issues and challenges facing the corporate debt market in India.
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Can MNREGA improve credit worthiness of participating households?
Subhasish Dey
Posted on: 11 Apr 2014

Based on household survey data from West Bengal, this column analyses the impact of MNREGA on economic outcomes of participating households. It finds that the ‘local’, ‘guaranteed’ and ‘government-related’ nature of MNREGA work helps improve credibility of workers with potential lenders such as grocery store owners, if they participate in the programme in a sustained manner. Access to informal credit helps improve consumption.
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Changing dynamics of the Indian gold market
Misha Sharma
Posted on: 13 Jan 2014

The demand for gold and its import have been on the rise in India, despite rising gold prices. The RBI has responded by introducing various measures to curb the demand for gold and gold loans. This column discusses the implications of these measures, and suggests complementing such curbs with innovative financial products that can act as substitutes for gold loans.
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Migrating out of poverty: The role of finance
Meghana Ayyagiri , Thorsten Beck , Mohammad Hoseini
Posted on: 13 Sep 2013

Financial liberalisation has been controversial as it is not clear whom the expanded credit allocation actually benefits. Using variation across time and states in India, this column finds strong evidence that financial deepening reduces rural poverty, especially among the self-employed. Financial deepening is also found to be associated with an inter-state migration trend from rural areas into the tertiary sector in urban areas.
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Does caste influence access to agricultural loans in rural India?
Sunil Mitra Kumar
Posted on: 03 Jun 2013
Tags:   credit


Increasing access to agricultural credit in rural India is a major policy priority. This column examines whether farmers’ access to formal agricultural loans depends on their caste. It is found that while commercial banks do not discriminate against lower caste farmers in lending, cooperative banks do as they are prone to interest-group capture at the local level.
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The value of land administration information for financial development
Aparajita Goyal
Posted on: 28 Aug 2012
Topics:   Land , Finance


While the effect of improved property rights on economic development has been extensively studied, the specific relationship between better land administration information and improved credit access is understudied. This column uses evidence to demonstrate that the computerisation of land registries reduces the cost of lending and can result in expanded access to credit for urban borrowers. It lists certain factors that can dilute these positive effects and argues that these need to be managed.
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