This article examines the impact of microenterprise credit programmes on class structure mobility in developing countries. It develops a model that endogenously generates an eight-fold class structure. Class membership is determined by optimal choice of labour activity, which is a function of...

This paper reports the results of an experiment testing a fundamental assumption in Stiglitz and Weiss' (1981) model of credit rationing: that defaulting borrowers are associated with investment in risky projects. Through an artefactual field experiment with 200 Bolivian microfinance borrowers,...