Credit markets in rural areas of developing countries also lack many features
that are taken for granted in most industrial countries. One obvious examplei
s a literatea nd numeratep opulation.P oorlyd evelopedc ommunications
in some rurala reasm ay also maket he use of formalb ank arrangementcso stly
for many individuals.I n addition, complementarym arketsm ay be missing.
The virtual absence of insurance markets to mitigate the problems of income
uncertaintyi s a typicale xample.I f individualsc ould insuret heir incomes,d efault
might be less of a problem. Another way to mitigate default problems is
to assemble individual credit histories and to sanction delinquent borrowers.
Suchm eanso f enforcingr epaymenat re commonplacei n mored evelopede con-