Microcredit InstitutionsIn this paper we apply the Principal/Agent theory in case of microcredit granted to
the Moroccan micro-companies. The practice reveals us that a part of the receipted credits is diverted from its initial objective. Indeed, a situation of information asymmetries linked with adverse selection and moral hazard can be noticed. Given that the Agent behavior (the debtor)is unobservable, the Principal (the Creditor) cannot select every time the good types of Agents.
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the Moroccan micro-companies. The practice reveals us that a part of the receipted credits is diverted from its initial objective. Indeed, a situation of information asymmetries linked with adverse selection and moral hazard can be noticed. Given that the Agent behavior (the debtor)is unobservable, the Principal (the Creditor) cannot select every time the good types of Agents.
Download here
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