Interpersonal versus interbank lending networks

Berlinger, Edina ORCID:, Gosztonyi, Márton ORCID:, Havran, Dániel ORCID: and Pollák, Zoltán (2023) Interpersonal versus interbank lending networks. Emerging Markets Review, 54 . DOI

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Analyzing the interpersonal lending network of a Hungarian village in a disadvantaged region, we find strong intermediary activity and a tiered core-periphery structure. We show that the main motive behind lending is not altruism or profit-seeking, but risk-sharing which is the most accentuated in poor-to-poor and Roma-to-Roma relations. Comparing this informal lending market to a formal interbank market, we find more similarities than differences. In both markets, intermediation is a key element in risk-sharing and an effective tool to cope with liquidity risk. Regulatory and development policies should respect the existing institutions of risk-sharing.

Item Type:Article
Uncontrolled Keywords:Financial exclusion, Liquidity management, Core-periphery, Intermediation, Risk-sharing, Reciprocity
JEL classification:G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
H31 - Fiscal Policies and Behavior of Economic Agents: Household
Divisions:Institute of Finance
Funders:Higher Education Institutional Excellence Program of the Ministry of Human Capacities
Projects:NKFIH-1163-10/2019, NKFIH K-138826
ID Code:7823
Deposited By: MTMT SWORD
Deposited On:20 Dec 2022 14:56
Last Modified:20 Dec 2022 14:56

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