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 …

Swarnajayanti Gram Swarozgar Yojana (SGSY) is a government-sponsored microfinance program. The scheme is based on four … features: group lending with joint liability, progressive lending, back-ended subsidy, and social capital. We propose a new … model of SGSY having these features: group lending with individual liability, progressive lending, back-ended subsidy, and …