Abstract
Credit cooperatives were widespread in nineteenth-century Germany, which is surprising given that country's highly developed banking system. One general explanation for the success of credit cooperatives emphasizes their ability to capitalize on superior information and to impose inexpensive but effective sanctions on defaulters. These features supposedly permit cooperatives to lend to individuals whom banks would spurn, and to tailor loan terms more closely to borrowers' needs. I use the business records of several German credit cooperatives to test this claim. The results show that real efficiency advantages are at least part of the explanation for their success.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
