Microfinance has been heralded as an effective way to address imperfections in credit markets. But from a theoretical … perspective, the success of microfinance contracts has puzzling elements. In particular, the group-based mechanisms often employed … created an experimental economics laboratory in a large urban market in Lima, Peru and over seven months conducted 11 …

Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the … contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental … games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions …

Microfinance has been heralded as an effective way to address imperfections in credit markets. From a theoretical … perspective, however, the success of microfinance contracts has puzzling elements. In particular, the group-based mechanisms often … created an experimental economics laboratory in a large urban market in Lima, Peru and over seven months conducted eleven …