Publication
Dec 2006
This publication assesses the claim that group liability improves repayment rates and lowers transaction costs, thereby improving the lender’s overall profitability and the poor’s access to financial markets. The authors conducted a field experiment with a Philippine bank to examine this issue. The publication finds that converting to individual liability from group liability but keeping other aspects of group lending, such as weekly repayment meetings, would be more profitable, as it would not affect the repayment rate, but lead to higher outreach by attracting new clients.
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English (PDF, 43 pages, 243 KB) |
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Author | Xavier Giné, Dean Karlan |
Series | CGD Working Papers |
Publisher | Center for Global Development (CGD) |
Copyright | © 2006 Center for Global Development (CGD) |