{
  "title": "Credit Quality in Developing Economies: Remittances to the Rescue?",
  "publication": "IMF Working Papers, August 8, 2014",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/index.md",
  "summary": "This paper analyzes the link between remittances inflows and nonperforming loans (NPLs) in a large sample of developing countries. Theoretical transmission channels include risk coping, exchange rate and growth impacts.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- The paper analyzes the link between remittances inflows and nonperforming loans (NPLs) in a large sample of developing countries.\n- Theoretical transmission channels discussed include: risk coping, exchange rate, and growth impacts.\n- Panel data estimates uncover the significant role of remittance inflows in reducing the size of NPLs in recipient economies.\n- Econometric results indicate a stronger marginal impact of remittances in a context of high macroeconomic instability, suggesting a significant effect of remittances on the likelihood of the private sector’s credit default during shocks.\n- Results hold after factoring in:\n  - (i) the endogeneity of remittance inflows; and\n  - (ii) the use of an alternative estimator (panel fractional logit) aimed at dealing with bounded dependent variables."
    },
    {
      "heading": "Methodology and robustness checks",
      "content": "- Empirical strategy: panel data estimates on a large sample of developing countries.\n- Robustness approaches explicitly mentioned:\n  - Instrumenting/remedying endogeneity of remittance inflows.\n  - Alternative estimator: panel fractional logit to account for bounded dependent variables."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Remittance inflows play a stabilizing role for credit quality in recipient developing economies by reducing NPLs.\n- The stabilizing effect of remittances is particularly pronounced during periods of high macroeconomic instability, implying remittances can lower the likelihood of private sector credit default in shocks.\n\n---\n\n Content in this bundle\n\n- wp14144\n  - wp14144 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp14144 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/bundle-manifest.json)",
    "Authors: Christian H Ebeke, Boileau Loko, Arina Viseth",
    "Published: August 8, 2014",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781498377911.001",
    "The paper analyzes the link between remittances inflows and nonperforming loans (NPLs) in a large sample of developing countries.",
    "Theoretical transmission channels discussed include: risk coping, exchange rate, and growth impacts.",
    "Panel data estimates uncover the significant role of remittance inflows in reducing the size of NPLs in recipient economies.",
    "Econometric results indicate a stronger marginal impact of remittances in a context of high macroeconomic instability, suggesting a significant effect of remittances on the likelihood of the private sector’s credit default during shocks.",
    "Results hold after factoring in:",
    "Empirical strategy: panel data estimates on a large sample of developing countries.",
    "Robustness approaches explicitly mentioned:",
    "Remittance inflows play a stabilizing role for credit quality in recipient developing economies by reducing NPLs.",
    "The stabilizing effect of remittances is particularly pronounced during periods of high macroeconomic instability, implying remittances can lower the likelihood of private sector credit default in shocks.",
    "**_wp14144**"
  ],
  "related": [
    {
      "title": "_wp14144",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp14144.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp14144.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp14144.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/credit-quality-in-developing-economies-remittances-to-the-rescue-41832/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T11:22:25.132Z"
}