{"id":{"repo_id":"mit","oai_identifier":"oai:dspace.mit.edu:1721.1/113949"},"canonical_url":"https://search.dev.ndltd.org/etd/mit/oai:dspace.mit.edu:1721.1/113949","repository":{"repo_id":"mit","name":"MIT","base_url":"https://dspace.mit.edu/oai/request"},"display":{"title":"Growing Pains in financial development : institutional weakness and investment efficiency","abstract":"There is little evidence that the expansion of microfinance has reduced poverty, but is instead increasingly associated with problematic multiple borrowing at high interest rates and high levels of debt and default. We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.","abstract_html":"There is little evidence that the expansion of microfinance has reduced poverty, but is instead increasingly associated with problematic multiple borrowing at high interest rates and high levels of debt and default. We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.","abstract_has_math":false,"creators":["Green, Daniel (Daniel Weiss)","Liu, Ernest Siyuan"],"institution":"Massachusetts Institute of Technology","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":"Sloan School of Management.","school":null,"contributors":[],"advisors":["Daron Acemoglu and Jonathan Parker."],"committee_chairs":[],"committee_members":[],"year":2017,"date_issued":"2017","date_published":"2017","updated_at":"2026-07-22T22:22:19Z","subjects":["Sloan School of Management.","Economics."],"languages":["eng"],"rights":["MIT theses are protected by copyright. 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We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes."]},{"key":"dc:description.degree","label":"Dc Description Degree","values":["S.M. in Management Research","S.M. in Economics"]},{"key":"dc:title","label":"Title","values":["Growing Pains in financial development : institutional weakness and investment efficiency"]}]}],"canonical_facts":{"dc:contributor.advisor":["Daron Acemoglu and Jonathan Parker."],"dc:contributor.department":["Sloan School of Management.","Massachusetts Institute of Technology. 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We develop a model that rationalizes these outcomes-if entrepreneurs cannot commit to exclusive borrowing from a single lender, expanding financial access by introducing multiple lenders may severely backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient and limited-growth endeavors. These problems are exacerbated when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes."],"dc:description.degree":["S.M. in Management Research","S.M. in Economics"],"dc:identifier.uri":["http://hdl.handle.net/1721.1/113949"],"dc:language.iso":["eng"],"dc:publisher":["Massachusetts Institute of Technology"],"dc:rights":["MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission."],"dc:rights.uri":["http://dspace.mit.edu/handle/1721.1/7582"],"dc:subject":["Sloan School of Management.","Economics."],"dc:title":["Growing Pains in financial development : institutional weakness and investment efficiency"],"dc:type":["Thesis"]},"updated_at":"2026-07-22T22:22:19Z"}