This paper investigates the farm-household decisions of adopting and abandoning higher-productivity technologies, under different scenarios of inclusion into the credit and deposit markets. The financial environment is further characterized by shallow financial markets, represented by a...

In this paper, we examine the contract design problem of banks that extend loans to poor borrowers and seek to maximize outreach while remaining financially sustainable. A dynamic model is developed that shows how interest rates can be determined based on information about productivity and...

This paper examines the contract design problem of microfinance institutions seeking to maximize outreach to the poor while remaining financially sustainable. A dynamic model of group lending is developed that shows how optimal interest rates depend on information regarding moral hazard and...