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2017-02-16 - Article/Dans un journal avec peer-review - Anglais - 22 page(s)

Laureti Carolina , "Why do Poor People Co-hold Debt and Liquid Savings?" in Journal of Development Studies, 54, 2, 213-234, 10.1080/00220388.2017.1299137

  • Edition : Routledge
  • Codes CREF : Economie des PVD (DI4375)
  • Unités de recherche UMONS : Economie et gestion de l'entreprise (W742)
  • Instituts UMONS : Institut de Recherche en Développement Humain et des Organisations (HumanOrg)
  • Centres UMONS : Microfinance (CERMI)

Abstract(s) :

(Anglais) I examine the use of flexible savings-and-loan accounts offered by SafeSave, a microfinance institution serving poor slum dwellers in Dhaka, Bangladesh. I find that 59 per cent of the clients co-hold, meaning that they borrow at high interest rates and simultaneously hold low-yield liquid savings. Co-holders could immediately pay down, on average, 32 per cent of their debt using liquid savings and thus avoid significant interest payments. The results show that co-holders are more likely to be regular workers subject to little income uncertainty, suggesting that co-holding is not a consequence of liquidity needs. The paper discusses alternative explanations.