The Part of Borrower-Cosigner Kinship Relations on Loan Default

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Proof from Italy Abstract Making use of information from a prominent Italian microfinance provider we investigate the consequence of kinship relations between borrowers and cosigners on loan defaults. We address causality problems making use of an instrumental variable constructed on the exogenous guideline imposed by the loan provider that will require individual guarantees for loans exceeding € 5000. Outcomes reveal …