Credit was scarce and expensive in colonial India. Existing explanations assume a lack of market competition let moneylenders charge high interest rates. The article challenges this view and constructs a novel framework to explain the rationality and strategies of lenders. Using new evidence from the Madras Presidency, the study finds that the interconnected issues of climate volatility and enforcement costs shaped the supply and prices of credit. Climate volatility and uncertain seasonal incomes led to high default rates. Enforcement of contracts through courts was expensive and not appropriate where there was no wilful breach of contract. Moneylenders responded to risk in innovative ways. They rationed credit and imposed inflexible enforcement terms in the dry regions that faced higher climatic risk, but used contracts and flexible pricing strategies in the irrigated zones where risks were lower.

中文翻译：

---

殖民地印度的信用风险

在殖民时期的印度，信贷稀缺且昂贵。现有的解释假设缺乏市场竞争让放债人收取高利率。本文对这一观点提出了挑战，并构建了一个新的框架来解释贷款人的理性和策略。该研究利用马德拉斯总统府的新证据发现，气候波动和执法成本等相互关联的问题影响了信贷的供应和价格。气候波动和不确定的季节性收入导致高违约率。通过法院执行合同成本高昂，在没有故意违约的情况下不合适。放债人以创新的方式应对风险。他们在面临较高气候风险的干旱地区实行信贷配给并实施不灵活的执行条件，