Some preliminary but troubling evidence on group credits in microfinance programmes

Helke Waelde

No 1101, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: Group lending programs are said to be the key factor of success of microÂ…nance. They are said to reduce information asymmetries in credit contracts and to increase repayment rates. Despite that, in recent years more and more individual credits without collateral are given, even if there is no mutual monitoring of the borrowers. We use basic descriptive statistics on individual- and group panel data, which we construct out of a World Bank data set. We provide Â…rst evidence that individuals that are not participating in group credits accumulate wealth more quickly than participants of group credit programs.

JEL-codes: E43 E52 E58 D44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-mac and nep-mfd
Date: 2010-12-07, Revised 2010-12-07
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Persistent link: http://EconPapers.repec.org/RePEc:jgu:wpaper:1101

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