Group liability is often portrayed as the key innovation that led to the explosion of the microcredit movement, which … liability claims to improve repayment rates and lower transaction costs when lending to the poor by providing incentives for … peers to screen, monitor and enforce each other’s loans. However, some argue that group liability creates excessive pressure …

Group liability in microcredit purports to improve repayment rates through peer screening, monitoring, and enforcement … overall effect, as well as specific mechanisms. The first removed group liability from pre-existing groups and the second … randomly assigned villages to either group or individual liability loans. In both, groups still held weekly meetings. We find …

Group liability in microcredit purports to improve repayment rates through peer screening, monitoring, and enforcement … overall effect, as well as specific mechanisms. The first removed group liability from pre-existing groups and the second … randomly assigned villages to either group or individual liability loans. In both, groups still held weekly meetings. We find …

In recent years, microfinance institutions have expanded into group lending with individual liability, leaving out the … joint liability clause which was an important feature in earlier lending contracts. Recent experimental evidence indicates … that group lending may yield benefits, specifically lowering default rates, even in the absence of joint liability. In this …

join in a microfinance system operating on the basis of individual liability credit contract, or on the basis of joint … liability loan contract through forming self-help group or may not participate in any type of microfinance system. This paper … individual liability loan contract, comparatively less wealthy prefers to join microfinance system operating on the basis of …

We study theoretically and empirically the demand for microcredit under different liability arrangements and risk … environments. A theoretical model shows that the demand for joint-liability loans can exceed that for individual-liability loans … when risk-averse borrowers value their long-term relationship with the lender. Joint liability then offers a way to …

Numerous authors point to a decline in joint liability microcredit, and rise in individual liability lending. But … lenders to reduce their use of joint liability loan contracts. Third, we test the model's key predictions, and find support …

liability does lead to better borrower performance and recent years have seen a shift towards individual liability lending …. Utilizing the exogenous shift from individual to joint liability lending by a microfinance organization in Pakistan, we find … given month under joint liability relative to individual liability. We also use the exogenous variation in number of months …