How flexible repayment schedules affect credit risk in agricultural microfinance

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dc.creatorWeber, Ron
dc.creatorMußhoff, Oliver
dc.creatorPetrick, Martin
dc.date2017-04-01T14:07:19Z
dc.date.accessioned2026-07-09T08:35:21Z
dc.descriptionUsing a unique dataset of a commercial microfinance institution in Madagascar, this paper investigates how the provision of microfinance loans with (in)flexible repayment schedules affects loan delinquencies of agricultural borrowers. Flexible repayment schedules allow a redistribution of principal payments during periods with low agricultural returns to periods when agricultural returns are high. We develop a theoretical framework and apply and estimate an econometric model for the loan repayment behavior of agricultural micro-borrowers with seasonal and non-seasonal production types. Our results reveal that delinquencies of non-seasonal farmers and seasonal farmers with inflexible repayment schedules are not significantly different from those of non-farmers. Furthermore, we find that seasonal farmers with flexible repayment schedules show significantly higher delinquencies than non-farmers in low delinquency categories, but we also find that this effect disappears in the highest delinquency category.
dc.identifierdoi:10.22004/ag.econ.187434
dc.identifierhttps://ageconsearch.umn.edu/record/187434/files/Weber_%20Musshoff_%20Petrick-DARE_DP_No_1404.pdf
dc.identifierhttp://ageconsearch.umn.edu/record/187434
dc.identifier.urihttp://hdl.handle.net/123456789/600610
dc.languageeng
dc.publisher
dc.sourcehttp://ageconsearch.umn.edu/record/187434
dc.titleHow flexible repayment schedules affect credit risk in agricultural microfinance
dc.typeText

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