Showing papers on "Credit risk published in 1978"
91 citations
Book•
31 Oct 1978
TL;DR: The financial cost of agricultural credit consists of direct and indirect costs incurred by lenders in providing credit to farmers as discussed by the authors, which is a substantial subsidy to borrowers and is partially offset by the inverse relationship between farm size and default rates.
Abstract: The financial cost of agricultural credit consists of direct and indirect costs incurred by lenders in providing credit to farmers. Depending upon the type of lending institution, average direct costs of formal sector agricultural credit in India appear to range from about 16% to slightly more than 20% of loan amounts outstanding. Indirect costs are much more difficult to quantify. Farmers pay about 12% for formal sector credit in India before adjustment for inflation, implying a substantial subsidy to borrowers. Larger farmers have greater effective access than smaller farmers to formal sector institutional credit and through their access capture the bulk of the subsidy. However, this is partially offset by the inverse relationship between farm size and default rates. Data from several other countries are included for comparative purposes. Measures for reducing the costs of credit are discussed.
16 citations
10 citations
TL;DR: In both the theoretical and empirical literature of finance, the relative riskiness of two debt instruments identical in all respects save the likelihood of default on payments of principal and/or interest has generally been measured by the difference between the yields to maturity of the two Debt instruments as discussed by the authors.
Abstract: In both the theoretical and empirical literature of finance the relative riskiness of two debt instruments identical in all respects save the likelihood of default on payments of principal and/or interest has generally been measured by the difference between the yields to maturity of the two debt instruments.
3 citations
2 citations