Is Multiple Borrowing a Bad Sign? Evidence from Bangladesh and India

  • Yasuyuki Sawada
  • Mari Tanaka
  • Minhaj Mahmud


In this chapter, we examine household panel data from Bangladesh and India, comparing unique settings of microcredit programs in these two countries to characterize the cause and nature of overlapping borrowing. Empirical findings from Bangladeshi data seem to show consistently “good” overlapping borrowing and the use of small and inflexible loans from multiple microfinance institutions (MFIs) to satisfy large borrowing demand. In contrast, the overall findings from India may support the interpretation of overlapping borrowings as a Ponzi scheme or missing targets. These observed differences between Bangladesh and India might be attributed to the differences in corporate governance in microfinance, as all MFIs in Bangladesh except Grameen Bank are non-governmental organizations (NGOs), whereas a significant proportion of Indian MFIs are regulated for-profit commercial financial institutions.


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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Yasuyuki Sawada
    • 1
  • Mari Tanaka
    • 2
  • Minhaj Mahmud
    • 3
  1. 1.University of TokyoTokyoJapan
  2. 2.Hitotsubashi UniversityTokyoJapan
  3. 3.Bangladesh Institute of Development StudiesDhakaBangladesh

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