Skip to Content

Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India

  • Topic: Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India
  • Speaker: Dr. Alberto Motta, University of NSW
  • Venue:E4A - 623 Seminar Room
  • When: 1st September, 2016, (Thu)
  • Time: 11:00 am - 12:00 pm (morning tea starts at 10:45 am)


Recent evaluations have found that traditional microloans have insignicant impacts on incomes and output. We examine if this is because microfinance institutions are unable to target productive borrowers. We conduct a randomized filed experiment in West Bengal with a different method of borrower selection for individual liability loans: this was delegated to local trader-lender agents incentivized by repayment-based commissions. We develop a theoretical model of differences in selection and production incentives between this variant (called TRAIL) and standard group loans (called GBL). Consistent with model predictions, we find that TRAIL borrowers had lower average default risk and achieved higher rates of return on their loans. TRAIL loans increased production of the leading cash crop and farm incomes by 27–37%, but GBL loans had insignificant effects. Differences in selection across observable borrower characteristics correlated with productivity accounts for at least 14% of this difference. Repayment rates were equally high in both schemes, while TRAIL had higher take-up rates and lower administrative costs.

Speaker Profile:

Alberto's research focuses on developing theoretical models and applying econometric methods in order to study the impact of collusion on information flows. He investigates the types and features of organizational design that are most effective. His current work focuses on designing and evaluating organizational solutions for microfinance institutions, for-profit and not-for-profit firms, enforcement agencies and media outlets.

His CV with publications can be viewed at


More Information

Related research seminars