HomeAsia-Pacific Social Science Reviewvol. 10 no. 1 (2010)

Borrowers in a Village Economy: An Analysis of Credit Contracts Across Rural Households

Tanmoyee Banerjee | Chandralekha Ghosh | Malabika Roy

Discipline: Social Science



The present study shows the impact of different borrower specific socio-economic, political and demographic characteristics on the probability that a loan will be taken from formal sources as well as on its size. We also study the impact of such factors on interlinked loan contracts. The study is based on a primary survey conducted in 24 Parganas (North), West Bengal, India. We observe that occupational categories, political identification, and economic status are the important determinants of loans taken from formal lending institutions. Another important observation is the existence of credit labour interlinkage in a tied loan market. Mostly poorer people have a higher probability of taking a tied loan.