Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending Groups
No hay miniatura disponible
Fecha
Autores
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
Group liability in microcredit purports to improve repayment rates through peer screening,
monitoring, and enforcement. However, it may create excessive pressure, and discourage reliable
clients from borrowing. Two randomized trials tested the 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 no increase in default and larger groups after three years in pre-existing areas, and no change in default but fewer groups created after two years in the expansion areas.