Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/129983 
Erscheinungsjahr: 
2014
Schriftenreihe/Nr.: 
School of Economics Discussion Papers No. 1415
Verlag: 
University of Kent, School of Economics, Canterbury
Zusammenfassung: 
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 paper, we develop a theoretical model where the public nature of group meetings means that borrowers have incentives to repay a group loan to safeguard their reputation. We show that the introduction of group loans with individual liability will cause sorting between joint liability and individual liability group loans. Specifically, borrowers who attach more importance to their reputation will select into individual liability loans, causing default rates and interest rates to rise for joint liability loans. The introduction of group loans with individual liability can even make joint liability loans infeasible in equilibrium.
Schlagwörter: 
Microfinance
Group Lending
Joint Liability
Social Sanctions
Reputation
JEL: 
G21
O12
O16
D8
Dokumentart: 
Working Paper

Datei(en):
Datei
Größe
355.1 kB





Publikationen in EconStor sind urheberrechtlich geschützt.