In this paper, a model of interaction of formal and informal credit markets has been developed where the bank official (the ultimate provider of formal credit) faces a lending constraint. The bank official takes a bribe from the borrowers to disburse formal credit and he deliberately debars some...

In this paper, a model of interaction of formal and informal credit markets has been developed where the bank official (the ultimate provider of formal credit) faces a lending constraint. The bank official takes a bribe from the borrowers to disburse formal credit and he deliberately debars some...

This paper is designed to provide different explanations for the existence of credit-product interlinkage in backward agriculture. The paper shows that the credit market imperfection is not the only explanation for the existence of credit-product interlinkage. It can also be explained in terms...

In the existing theoretical literature on credit-product interlinkage, the trader (interlocker) is not allowed to offer a Fixed-Rental Contract (FRC) where the trader leases-in land from the farmer in exchange of a fixed rent for self-cultivation. But if the trader is allowed to offer an FRC,...

A model of interlinked credit-product contracts between small farmers and large farmers when the small farmer faces delay in getting formal credit and the large farmer does not, has been developed. The small farmer remains on the reservation income level, and his reservation income is inversely...

What determines the development of rural financial markets? Starting from a simple theoretical framework, we derive the factors shaping the market entry of rural microfinance institutions across time and space. We provide empirical evidence for these determinants using the expansion of credit...

This note introduces a crop-insurance scheme in a Gupta (1990) type of model of interlinked credit-sharecropping contract. Gupta's proposition that there exists a critical size of innovation for the landlord is shown to be valid even when the landlord does not face any risk of default of loan,...