Group Lending Dynamics and Enhancing Financial Access for the Underbanked, Lessons for Africa

Anupama Sethi () and David Mhlanga
Additional contact information
Anupama Sethi: Monash Business School
David Mhlanga: The University of Johannesburg

Chapter Chapter 17 in Sustainable Finance and Business in Sub-Saharan Africa, 2024, pp 335-369 from Springer

Abstract: Abstract This chapter explores the dynamics of group lending mechanisms and their role in enhancing financial access for the underbanked, focusing on lessons that can be drawn for Africa. Group lending has emerged as a powerful tool for microfinance for poor populations lacking conventional collateral to secure loans. This chapter examines the core mechanisms underpinning successful group lending, including joint liability, self-selection of group members, frequent loan repayments, progressive lending, and sequential lending. It delves into the distinctive features of the two dominant group lending models, the Grameen Model and the Self-Help Group (SHG) Model, highlighting their reliance on social and partial physical collateral. This chapter provides insights into how these mechanisms can be adapted to the African context to promote financial inclusion and alleviate poverty through a detailed review of these models and their impact on repayment performance.

Keywords: Africa; Financial access; Underbanked; Group lending (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-031-74050-3_17

Ordering information: This item can be ordered from
http://www.springer.com/9783031740503

DOI: 10.1007/978-3-031-74050-3_17

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().