by
Jean Drèze
Delhi Centre for Development Economics
Peter Lanjouw
The World Bank
Naresh Sharma
Hyderabad Institute of Public Enterprises
Contents:
Abstract
Introduction and Background
1. Credit Transactions in Palanpur
2. Public Institutions
3. Allies and Patrons
4. Urban Moneylenders
5. Village Lenders
6. Comparative Overview and Conclusions
References
The Suntory Centre
Suntory and Toyota International Centres for
Economics and Related Disciplines
London School of Economics and Political Science
Discussion Paper
DEDPS/6
September 1997
Houghton Street
2AE
Tel.: 0207 955 6674
This study has greatly benefited from discussions with Tony Atkinson, Kaushik Basu,
Christopher Bliss, Lucia da Corta, Haris Gazdar, Karl Hoff, Stephen Howes, Shanda Jain,
Jean Olson Lanjouw, Jean-Philippe Platteau, Nicholas Stern, S.S. Tyagi (Jr) and Vijay Vyas.
We are particularly grateful to Haris Gazdar for detailed comments on an earlier draft, and to
Samarjit Shankar for excellent research assistance.
NB: This PDF was retrospectively created in February 2004 of the STICERD discussion paper previously known as DERP No.6 which was published in 1997.

Abstract
This paper presents a case study of credit transactions in Palanpur, a north Indian village. Drawing on detailed informtion from all borrowers and lenders in the village, we examine a number of issues related to the functioning of rural credit markets.
These include the segmentation of the credit market, the achievements and failure of public lending institutions, the role of interest-free lending, the lending strategies of village moneylenders, social inequalities in access to credit, and the politics of rural credit, among others. An attempt is also made to relate these findings to those of other studies of credit in rural India.
Keywords: India, Palanpur, rural credit markets.
JEL Nos.: G2, O16, Q14, D23
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