Impact of Monitoring Activities and Social Ties on the Repayment Problems of group-Based Lending-Evidence from Vietnam

Tran Ba-Tri, Loc Dong Truong and Pham Phat Tien
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Tran Ba-Tri: School of Economics, Can Tho University, Vietnam
Loc Dong Truong: School of Economics, Can Tho University, Vietnam
Pham Phat Tien: School of Economics, Can Tho University, Vietnam

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 8, 478-487

Abstract: This study examines how monitoring activities by group leaders and social ties within groups influence repayment rates in the Vietnam Bank for Social Policy’s group lending program in the Mekong Delta. Data used in this paper was obtained from a survey of 675 members from lending groups in 5 provinces in the Mekong Delta in September 2022. The analysis finds a negative relationship between the leader’s social ties and repayment rates, implying that strong social ties might hinder enforcement. However, the impact of leader monitoring, member-level monitoring, and social ties was not statistically significant. Interestingly, group characteristics like size and regulations may play a more significant role in reducing repayment problems.

Date: 2024
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