Determinants of existence of credit unions in Brazil

Author(s)

Bethânia de Alencar Gama Lyra

• Document type: Master's Dissertation
• Press: São Paulo.
• Institution: Universidade de São Paulo (USP). Faculdade de Economia, Administração e Contabilidade (FEA/SBD)
• Defense date: 2011-11-25

Examining board members

Gabriel de Abreu Madeira; Sérgio Mikio Koyama; Mauro Rodrigues Junior

• Advisor: Gabriel de Abreu Madeira

Abstract

Market failures such as informational imperfections and problems with enforcement may lead alternative financial arrangements, such as credit unions, to have superior results compared to the traditional banking system. This advantage depends on local characteristics such as trust and shared information, or social capital, in the municipality. Thisdissertation conducts an empirical evaluation due to the idea expressed above. It tests if the social capital, measured by valid votes in elections for city council, homogeneity of income, religion and race, impacts the amount of credit unions in Brazilian municipalities from 2000 to 2008. The results confirm the thesis exposed above indicating that social capital is positively related to the number of credit unions in Brazil. However, the results depend on which variables are used to measure the social capital existing. It is possible that some variables used related to homogeneity and immigration are not good measures of social capital. Moreover, there is also evidence that this positive association is not only the result of a positive relationship with credit in general. (AU)

• FAPESP's process: 09/12849-5 - Determinants of the emergence of credit cooperatives in Brazil
• Grantee: Bethânia de Alencar Gama Lyra
• Support Opportunities: Scholarships in Brazil - Master