Lang, KevinLeong, KaiwenLi, HuailuXu, Haibo2024-06-052024-06-052022K. Lang, K. Leong, H. Li, H. Xu. 2022. "Borrowing in an Illegal Market: Contracting with Loan Sharks" The Review of Economics and Statistics, pp.1-31. https://doi.org/10.1162/rest_a_012460034-65351530-9142https://hdl.handle.net/2144/48982Using over 11,000 unlicensed loans to over 1,000 borrowers in Singapore, we provide basic information about an understudied market: illegal moneylending. Borrowers and lenders interact frequently and primarily rely on relational contracts to enforce their agreements. Borrowers have high discount rates, often have gambling and/or substance abuse problems, and often repay late. While lenders sometimes resort to nonfinancial punishments, the primary cost of late repayment is the compounding of a very high interest rate. Consistent with our view that lenders cannot extract all surplus, a crackdown on illegal lending raised interest rates and lowered the size of loans.p. 1-31enApplied economicsEconometricsEconomicsBanking, finance and investmentArticle2024-02-0310.1162/rest_a_012460000-0002-8497-1706 (Lang, Kevin)827854