Does Participation in Productive Associations Signal Trust and Creditworthiness? Evidence for Nicaragua

This article studies the extent to which participation in productive associations in Nicaragua contributes to increase individuals' access to social programs and credit services. By participating in productive associations, individuals give a good signal to firms and are rewarded with better transactions and more access to the services they provide, ceteris paribus. Estimates using 2005 data indicate that households that participate in productive associations display higher access to credit and to social programs that promote investment. Additionally, participation in productive associations is weakly associated to more favorable credit outcomes among those households that receive loans, such as lower interest rates and a lower probability of wanting more credit than what was accessible to them.

Bibliographic Details

Main Authors:	Angel-Urdinola, Diego F., Molina, Ezequiel
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2008-02
Subjects:	ACCESS TO CREDIT, ACCESS TO LOANS, ACCESS TO SERVICES, ASYMMETRIC INFORMATION, AVERAGE INTEREST, BANKS, BENEFICIARIES, CAPITAL ACCUMULATION, CASH TRANSFERS, CHECKS, COLLECTIVE, COLLECTIVE ACTION, COLLECTIVE ACTION PROBLEM, CONSUMER, CONVENTIONAL BANKS, COOPERATIVES, CREDIT CARDS, CREDIT MARKETS, CREDIT NEEDS, CREDIT RATIONING, CREDIT SOURCES, CREDIT UNIONS, CREDITOR, CREDITORS, CREDITWORTHINESS, DEMOCRACY, DEVELOPING COUNTRIES, DUMMY VARIABLE, ECONOMIC BENEFITS, ECONOMIC CONDITIONS, ECONOMICS, EDUCATION PROGRAMS, EMPLOYMENT, EMPOWERMENT, EQUALITY, FAMILIES, FARMERS, FORMAL CREDIT, FORMAL LOANS, GAME THEORY, GENDER, HOUSEHOLD ACCESS, HOUSEHOLDS, HUMAN CAPITAL, IMPERFECT INFORMATION, INCOME, INDIRECT COSTS, INDIVIDUALS, INFORMAL CREDIT, INFORMAL LENDERS, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INVESTMENT ASSET, LENDERS, LEVEL OF CONFIDENCE, LOAN, LOAN DECISIONS, LOCAL GOVERNMENT, LOWER INTEREST RATES, MERCHANTS, MICRO-CREDITS, MICRO-FINANCE, MICRO-FINANCE INSTITUTIONS, MUNICIPALITY, NUTRITION, PACIFIC REGION, PARTICIPATIONS, PERFECT INFORMATION, POLITICAL PARTICIPATION, PRINCIPAL-AGENT, PRINCIPAL-AGENT PROBLEMS, PRIVATE BANKS, PROBABILITY, PRODUCTIVITY, PROFESSIONAL ASSOCIATIONS, PROXY, PUBLIC FIRMS, PUBLIC FUNDS, RELIGIOUS GROUPS, RESOURCE ALLOCATIONS, RESPONSIBILITIES, RETURN, RETURNS, RULE OF LAW, SAVINGS, SECONDARY SCHOOL, SIGNALING EFFECT, SOCIAL ASSISTANCE, SOCIAL CAPITAL, TYPE OF INVESTMENT, URBAN AREAS, VALUABLE, VILLAGE, WAGE, WORTH,
Online Access:	http://documents.worldbank.org/curated/en/2008/02/8995267/participation-productive-associations-signal-trust-creditworthiness-evidence-nicaragua http://hdl.handle.net/10986/6425
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