Group lending as a mechanism for self-insuring default risk

IF 0.8 Q4 BUSINESS, FINANCE

Annals of Finance Pub Date : 2024-07-28 DOI:10.1007/s10436-024-00447-4

Andreas Krause

引用次数: 0

Abstract

We show that banks can provide loans at low costs to high-risk borrowers in the form of a group lending contract in which all members are jointly liable for their loans. By providing such contracts borrowers self-insure against some of the default risk the bank faces. We determine the optimal group size in a competitive banking system and find that it is reasonably small and borrowers internalize an increasing fraction of the risk the higher their risks are.

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作为违约风险自我保险机制的集体贷款

我们的研究表明，银行可以以集体贷款合同的形式向高风险借款人提供低成本贷款，在这种合同中，所有成员对其贷款承担连带责任。通过提供这种合同，借款人可以对银行面临的部分违约风险进行自我保险。我们确定了竞争性银行体系中的最佳集团规模，并发现该规模相当小，而且借款人的风险越高，其内部化的风险就越大。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Annals of Finance BUSINESS, FINANCE-

CiteScore

2.00

自引率

10.00%

发文量

期刊介绍： Annals of Finance provides an outlet for original research in all areas of finance and its applications to other disciplines having a clear and substantive link to the general theme of finance. In particular, innovative research papers of moderate length of the highest quality in all scientific areas that are motivated by the analysis of financial problems will be considered. Annals of Finance''s scope encompasses - but is not limited to - the following areas: accounting and finance, asset pricing, banking and finance, capital markets and finance, computational finance, corporate finance, derivatives, dynamical and chaotic systems in finance, economics and finance, empirical finance, experimental finance, finance and the theory of the firm, financial econometrics, financial institutions, mathematical finance, money and finance, portfolio analysis, regulation, stochastic analysis and finance, stock market analysis, systemic risk and financial stability. Annals of Finance also publishes special issues on any topic in finance and its applications of current interest. A small section, entitled finance notes, will be devoted solely to publishing short articles – up to ten pages in length, of substantial interest in finance. Officially cited as: Ann Finance