Group lending through an SHG bank-linkage programme in India: transaction costs and social benefits

Meenakshi Rajeev, B. P. Vani and Veerashekharappa

Development in Practice, 2020, vol. 30, issue 2, 168-181

Abstract: Group lending is useful in channelling credit to the self-employed poor in developing countries, to whom banks usually prefer not to lend, and formation of self-help groups (SHGs) helps facilitate this. In India, SHGs can access credit through private microfinance organisations or can approach banks through a state-led bank-linkage programme. Scholars argue that transaction costs are high while borrowing from banks despite relatively lower interest rates, making this uneconomical. This article uses a field survey to estimate transaction costs, presents other social benefits of the programme, and finds empirical justifications for strengthening the bank-linkage programme.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09614524.2018.1508418 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:cdipxx:v:30:y:2020:i:2:p:168-181

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/cdip20

DOI: 10.1080/09614524.2018.1508418

Access Statistics for this article

Development in Practice is currently edited by Emily Finlay

More articles in Development in Practice from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().