The poor are often excluded from formal credit markets, but few empirical studies in literature have investigated whether the poor are constrained in the informal credit market. This paper uses recent micro data of rural China to answer this question. An instrumental variable model is estimated...

The interest rate is one of the most important factors in farmers' decision-making of borrowing and lending in the informal financial market in China. This paper explores the determinants of the interest rate with microfinance data. Results show that the income disparity, the relationship...