A moral hazard arises if the borrower applies the borrowed funds to different investment projects than those agreed upon with the lender, who is hindered by his lack of information and control over the borrower (Bebczuk 2003).
It puts more control in the hands of the borrower, so they can avoid the vicious cycle of consumer debt.
These results hold in analyses performed at matched bank-industry level, but also in specifications using matched bank-loan data that control for the quality of the borrower by means of firm-year fixed effects.
Credit card bills, installment debt, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt.
Subsidiary means a company which is controlled by the borrower through ownership of voting stock, and is further defined in 7 CFR 1767.10.
Microfinance group leaders and NGO field officers take control of all the household assets of the borrower (land, home, jewelry, equipment, food reserves, animals, remittances, savings, furnishings, etc)., and force borrowers to convert those assets to cash if there is the slightest threat of default of any borrower within the group.
We adamantly disagree with any proposal that would remove control of the Bank from the women borrowers who own a majority of the Bank's shares.
This is sometimes called "laddering" your debt, and helps the borrower feel more actively in control of the debt.
But what makes WeFinance different is that borrowers are more in control of the experience.
