Impacts of Caste, Risk, and Time Preference on Borrowing Behaviour: A Case Study in West Bengal, India

  • Nina Takashino
  • Keshav L. Maharjan
  • Seiichi Fukui


The objectives of this chapter are to investigate the determinants of households’ borrowing behaviour in rural India, focusing on the impacts of caste, risk coping behaviour, and discount rate. Our main findings are as follows: First, the results of estimation suggest that the upper caste households are more likely to get lower interest loan from formal financial institutions or relatives and friend, while it may be difficult for the lower caste households to have access to such lower interest loan. Second, the results imply that if households borrow money to cope with shocks, they tend to get zero interest loans from relatives and friends. Third, the households who belong to the upper caste can borrow the larger amount of money. These findings suggest that the upper caste households accumulate the larger social capital. Fourth, the estimation results indicate that higher the discount rate, smaller the amount of zero interest loans from relatives and friends. Our findings suggest that caste and time preference play important roles to determine borrowing behaviour in West Bengal, India.


Discount Rate Time Preference Family Labor Lower Caste Microfinance Institution 
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Copyright information

© Springer India 2014

Authors and Affiliations

  • Nina Takashino
    • 1
  • Keshav L. Maharjan
    • 2
  • Seiichi Fukui
    • 3
  1. 1.Tohoku UniversitySendaiJapan
  2. 2.Hiroshima UniversityHiroshimaJapan
  3. 3.Kyoto UniversityKyotoJapan

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