Che, Yeon-Koo - In: Contributions to Theoretical Economics 2 (2002) 1, pp. 1016-1016
This paper studies an incentive rationale for the use of group lending as a method of financing liquidity …-constrained entrepreneurs. The joint liability feature associated with group lending lowers the liquidity risk of default but creates a free … making group lending unattractive. When the projects are repeated infinitely many times, however, the joint liability feature …