Assessing the extent and mechanism of Informal credit amongst urban poor: Lessons for Governance [Slides]
This paper examines the relationship between the deep rooted socio-economic deprivations and consequent credit behaviour of the urban poor. I study various factors like stable and sufficient income, agricultural land holding, financial inclusion and rate of interest. Drawing from detailed information collected through a primary survey in Delhi, I found that lack of documentation, absence of safety net and information gap between formal lenders and urban poor as leading causes of informal indebtedness. The policy suggestions predicated upon the the study includes empowering and availing already established grass-root governance networks in order to improve the accessibility of formal credit to the urban poor, ensuring income and employment safety nets in order to minimize short term exploitative borrowings for consumption, we also proposed some grounded policy suggestions which can be replicated from their rural governance counterparts for facilitating access to formal credit in socially and economically deprived urban populations.
This paper was awarded best paper under 'Urban Governance' theme at 17th South Asian Economics Students Meet.