Using a survey dataset collected from Andhra Pradesh, India, we test if multiple borrowing is equivalent to over-borrowing. Results suggest that over-borrowing and multiple loans are not necessarily synonymous. As the number of credit agencies in a village increases, the average loan burden of villagers does not increase. We also find evidence of substitution of formal sources of credit for informal ones with increased presence of formal credit institutions. Such substitution is greater with addition of microcredit institutions than with other formal lending agencies. Our results indicate that joint liability setup seems to ensure that individuals at a greater risk of non-repayment are discouraged from obtaining microcredit.

Baqui Khalily, M.A. (2011) Multiple Borrowing by Microfinance Clients, Policy Brief [pdf], Institute of Microfinance <http://inm.org.bd/policybr/multiple-borrowing-by-mfi-clients/> [accessed 14 September 2015].

Biswas, S. (2010) ‘India’s micro-finance suicide epidemic’, BBC News, 16 December 2010 [online], <www.bbc.co.uk/news/world-south-asia-11997571> [accessed 11 September 2015].

Harris, A. (2010) ‘A case of multiple borrowing’ [online], Microfinance Africa, 7 July 2010 <http://microfinanceafrica.net/news/a-case-of-multiple-borrowings/> [accessed 11 September 2015]

Johnson, D. and Meka, S. (2010) Access to Finance in Andhra Pradesh [online], Centre for Microfinance, IFMR Lead <http://ifmrlead.org/access-to-finance-in-andhra-pradesh/> [accessed 20 January 2016].

Lahkar, R. and Pingali, V. (2014) ‘Risk diversification through multiple group membership’, Applied Economics Letters 21(9): 622–5 <http://dx.doi.org/10.1080/13504851.2013.879277>.

Lahkar, R., Pingali, V. and Sadhu, S. (2012) Does Competition in the Microfinance Industry Necessarily Mean Over-borrowing, Working Paper, Ahmedabad, India: Indian Institute of Management Ahmedabad.

McIntosh, C., de Janvry, A. and Sadoulet, E. (2005) ‘How raising competition among microfinance institutions affects incumbent leaders’, Economic Journal 115: 987–1004 <http://dx.doi.org/10.1111/j.1468-0297.2005.01028.x>.

Malegam Committee Report (2011) Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in the MFI Sector [pdf], Mumbai: Reserve Bank of India <https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/YHMR190111.pdf> [accessed 11 September 2015].

Perkins, A. (2008) ‘A short history of microfinance’, The Guardian, 3 June 2008 [online] <www.theguardian.com/katine/2008/jun/03/livelihoods.projectgoals1> [accessed 11 September 2015].

Taylor, M. (2011) ‘Freedom from poverty is not free: rural development and microfinance crisis in Andhra Pradesh, India’, Journal of Agrarian Change 11(4): 484–504 <http://dx.doi.org/10.1111/j.1471-0366.2011.00330.x>.

Baqui Khalily, M.A. (2011) Multiple Borrowing by Microfinance Clients, Policy Brief [pdf], Institute of Microfinance <http://inm.org.bd/policybr/multiple-borrowing-by-mfi-clients/> [accessed 14 September 2015].

Biswas, S. (2010) ‘India’s micro-finance suicide epidemic’, BBC News, 16 December 2010 [online], <www.bbc.co.uk/news/world-south-asia-11997571> [accessed 11 September 2015].

Harris, A. (2010) ‘A case of multiple borrowing’ [online], Microfinance Africa, 7 July 2010 <http://microfinanceafrica.net/news/a-case-of-multiple-borrowings/> [accessed 11 September 2015]

Johnson, D. and Meka, S. (2010) Access to Finance in Andhra Pradesh [online], Centre for Microfinance, IFMR Lead <http://ifmrlead.org/access-to-finance-in-andhra-pradesh/> [accessed 20 January 2016].

Lahkar, R. and Pingali, V. (2014) ‘Risk diversification through multiple group membership’, Applied Economics Letters 21(9): 622–5 <http://dx.doi.org/10.1080/13504851.2013.879277>.

Lahkar, R., Pingali, V. and Sadhu, S. (2012) Does Competition in the Microfinance Industry Necessarily Mean Over-borrowing, Working Paper, Ahmedabad, India: Indian Institute of Management Ahmedabad.

McIntosh, C., de Janvry, A. and Sadoulet, E. (2005) ‘How raising competition among microfinance institutions affects incumbent leaders’, Economic Journal 115: 987–1004 <http://dx.doi.org/10.1111/j.1468-0297.2005.01028.x>.

Malegam Committee Report (2011) Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in the MFI Sector [pdf], Mumbai: Reserve Bank of India <https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/YHMR190111.pdf> [accessed 11 September 2015].

Perkins, A. (2008) ‘A short history of microfinance’, The Guardian, 3 June 2008 [online] <www.theguardian.com/katine/2008/jun/03/livelihoods.projectgoals1> [accessed 11 September 2015].

Taylor, M. (2011) ‘Freedom from poverty is not free: rural development and microfinance crisis in Andhra Pradesh, India’, Journal of Agrarian Change 11(4): 484–504 <http://dx.doi.org/10.1111/j.1471-0366.2011.00330.x>.

Baqui Khalily, M.A. (2011) Multiple Borrowing by Microfinance Clients, Policy Brief [pdf], Institute of Microfinance <http://inm.org.bd/policybr/multiple-borrowing-by-mfi-clients/> [accessed 14 September 2015].

Biswas, S. (2010) ‘India’s micro-finance suicide epidemic’, BBC News, 16 December 2010 [online], <www.bbc.co.uk/news/world-south-asia-11997571> [accessed 11 September 2015].

Harris, A. (2010) ‘A case of multiple borrowing’ [online], Microfinance Africa, 7 July 2010 <http://microfinanceafrica.net/news/a-case-of-multiple-borrowings/> [accessed 11 September 2015]

Johnson, D. and Meka, S. (2010) Access to Finance in Andhra Pradesh [online], Centre for Microfinance, IFMR Lead <http://ifmrlead.org/access-to-finance-in-andhra-pradesh/> [accessed 20 January 2016].

Lahkar, R. and Pingali, V. (2014) ‘Risk diversification through multiple group membership’, Applied Economics Letters 21(9): 622–5 <http://dx.doi.org/10.1080/13504851.2013.879277>.

Lahkar, R., Pingali, V. and Sadhu, S. (2012) Does Competition in the Microfinance Industry Necessarily Mean Over-borrowing, Working Paper, Ahmedabad, India: Indian Institute of Management Ahmedabad.

McIntosh, C., de Janvry, A. and Sadoulet, E. (2005) ‘How raising competition among microfinance institutions affects incumbent leaders’, Economic Journal 115: 987–1004 <http://dx.doi.org/10.1111/j.1468-0297.2005.01028.x>.

Malegam Committee Report (2011) Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in the MFI Sector [pdf], Mumbai: Reserve Bank of India <https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/YHMR190111.pdf> [accessed 11 September 2015].

Perkins, A. (2008) ‘A short history of microfinance’, The Guardian, 3 June 2008 [online] <www.theguardian.com/katine/2008/jun/03/livelihoods.projectgoals1> [accessed 11 September 2015].

Taylor, M. (2011) ‘Freedom from poverty is not free: rural development and microfinance crisis in Andhra Pradesh, India’, Journal of Agrarian Change 11(4): 484–504 <http://dx.doi.org/10.1111/j.1471-0366.2011.00330.x>.

Baqui Khalily, M.A. (2011) Multiple Borrowing by Microfinance Clients, Policy Brief [pdf], Institute of Microfinance <http://inm.org.bd/policybr/multiple-borrowing-by-mfi-clients/> [accessed 14 September 2015].

Biswas, S. (2010) ‘India’s micro-finance suicide epidemic’, BBC News, 16 December 2010 [online], <www.bbc.co.uk/news/world-south-asia-11997571> [accessed 11 September 2015].

Harris, A. (2010) ‘A case of multiple borrowing’ [online], Microfinance Africa, 7 July 2010 <http://microfinanceafrica.net/news/a-case-of-multiple-borrowings/> [accessed 11 September 2015]

Johnson, D. and Meka, S. (2010) Access to Finance in Andhra Pradesh [online], Centre for Microfinance, IFMR Lead <http://ifmrlead.org/access-to-finance-in-andhra-pradesh/> [accessed 20 January 2016].

Lahkar, R. and Pingali, V. (2014) ‘Risk diversification through multiple group membership’, Applied Economics Letters 21(9): 622–5 <http://dx.doi.org/10.1080/13504851.2013.879277>.

Lahkar, R., Pingali, V. and Sadhu, S. (2012) Does Competition in the Microfinance Industry Necessarily Mean Over-borrowing, Working Paper, Ahmedabad, India: Indian Institute of Management Ahmedabad.

McIntosh, C., de Janvry, A. and Sadoulet, E. (2005) ‘How raising competition among microfinance institutions affects incumbent leaders’, Economic Journal 115: 987–1004 <http://dx.doi.org/10.1111/j.1468-0297.2005.01028.x>.

Malegam Committee Report (2011) Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in the MFI Sector [pdf], Mumbai: Reserve Bank of India <https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/YHMR190111.pdf> [accessed 11 September 2015].

Perkins, A. (2008) ‘A short history of microfinance’, The Guardian, 3 June 2008 [online] <www.theguardian.com/katine/2008/jun/03/livelihoods.projectgoals1> [accessed 11 September 2015].

Taylor, M. (2011) ‘Freedom from poverty is not free: rural development and microfinance crisis in Andhra Pradesh, India’, Journal of Agrarian Change 11(4): 484–504 <http://dx.doi.org/10.1111/j.1471-0366.2011.00330.x>.