Repayment Incentives and the Distribution of Gains from Group Lending
Published By: CDE on eSS | Published Date: November, 17 , 2010Group loans with joint liability have been a distinguishing feature of many micro nance
programs. While such lending has bene tted millions of borrowers, major lending insti-
tutions have acknowledged their limited impact among the very poor and have recently
favored individual contracts. This paper attempts to understand these empirical patterns
using a model in which there is a single investment project and access to credit is limited
by weak repayment incentives. [Working Paper No. 192]
Author(s): Rohini Somanathan, Jean-Marie Baland, Zaki Wahhaj | Posted on: Dec 17, 2010 | Views(1146) | Download (132)