Loans and Leaving: Migration and the Expansion of Microcredit in Cambodia

Loans and Leaving: Migration and the Expansion of Microcredit in Cambodia Over the last decade, the expansion of microfinance institutions (MFIs) has dramatically shifted the availability of credit across the developing world. This recent development provides an opportunity to examine the relationship between household labor migration and access to and use of formal credit. Both theories of migration and the expectations of formal credit providers have suggested that labor migration and credit are substitute solutions to the demand for capital in the developing world, with the implication that greater access to formal financial services may stem migration out of rural places. Using household survey data from Cambodia, an MFI-saturated country, we find that households using formal credit and households with greater access to formal credit are more likely to have labor migrants than households without access. This association persists across size of loan, purpose of loan, remittances behavior, and for domestic migrations. These findings complicate our understanding of the relationship between credit and migration, and call for a greater recognition of the importance of context in framing migration behavior. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Population Research and Policy Review Springer Journals

Loans and Leaving: Migration and the Expansion of Microcredit in Cambodia

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Publisher
Springer Netherlands
Copyright
Copyright © 2015 by Springer Science+Business Media Dordrecht
Subject
Social Sciences, general; Demography; Sociology, general; Population Economics
ISSN
0167-5923
eISSN
1573-7829
D.O.I.
10.1007/s11113-015-9367-8
Publisher site
See Article on Publisher Site

Abstract

Over the last decade, the expansion of microfinance institutions (MFIs) has dramatically shifted the availability of credit across the developing world. This recent development provides an opportunity to examine the relationship between household labor migration and access to and use of formal credit. Both theories of migration and the expectations of formal credit providers have suggested that labor migration and credit are substitute solutions to the demand for capital in the developing world, with the implication that greater access to formal financial services may stem migration out of rural places. Using household survey data from Cambodia, an MFI-saturated country, we find that households using formal credit and households with greater access to formal credit are more likely to have labor migrants than households without access. This association persists across size of loan, purpose of loan, remittances behavior, and for domestic migrations. These findings complicate our understanding of the relationship between credit and migration, and call for a greater recognition of the importance of context in framing migration behavior.

Journal

Population Research and Policy ReviewSpringer Journals

Published: May 24, 2015

References

  • Conditional cash transfer programs, credit constraints, and migration
    Angelucci, M

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