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Determinants of Loan Repayment: Experience from Indian Microcredit Programme

Ramu Maurya
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Ramu Maurya: Govind Ballabh Pant Social Science Institute, Allahabad, India.

International Journal of Economics and Empirical Research (IJEER), 2015, vol. 3, issue 10, 489-498

Abstract: Purpose: We provide an empirical analysis of the impact of monitoring within group based lending programmes on moral hazard behavior of its participants. Methodology: Based on the data from an extensive questionnaire held in Uttar Pradesh, India among 200 participants. Findings: The study finds new information that agent who is outsider of the group, it may be credit officer or other who nurtured and form the group, may be an emergent determinant of loan repayment. We find support for the fact that monitoring by the credit officer do help to reduce moral hazard behavior of group member and improve the repayment of loan. This study supports the emerging BCs model in India and in the world level. Recommendations: The main idea is that it reduces the marginal cost of monitoring and group conflict emerged by peer monitoring within group.

Keywords: Group Lending; Monitoring cost; Moral Hazard; Peer monitoring; Repayment (search for similar items in EconPapers)
JEL-codes: D82 H I32 I3 (search for similar items in EconPapers)
Date: 2015
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