TY - BOOK ID - 134883314 TI - Productivity Shocks and Repayment Behavior in Rural Credit Markets : A Framed Field Experiment AU - Adjognon, Guigonan Serge. AU - Liverpool-Tasie, Lenis Saweda. AU - Shupp, Robert. PY - 2018 PB - Washington, D.C. : The World Bank, DB - UniCat KW - Access to Credit KW - Access to Finance KW - Agriculture KW - Cash Crop KW - Climate Change KW - Commodities KW - Finance and Financial Sector Development KW - Macroeconomics and Economic Growth KW - Market Failure KW - Productivity KW - Rural Finance UR - https://www.unicat.be/uniCat?func=search&query=sysid:134883314 AB - Improving rural credit markets requires a good understanding of the root causes of market failures and taking necessary steps to address them. This paper investigates the role of productivity shocks in borrowers' repayment choices. Using a framed field experiment that simulated a repeated interaction in an input credit market, the analysis finds strong evidence that negative productivity shocks lead to higher default, even when they do not induce negative returns. This relationship is robust to the presence of an information exchange system enforcing dynamic incentives. The findings suggest that recurrent agricultural production shocks resulting from the negative effects of climate change could exacerbate failures in rural credit markets, undermining hard-won progress toward rural financial inclusion. ER -