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The Economics of Lending with Joint Liability: Theory and Practice

Maitreesh Ghatak () and Timothy Guinnane ()

No 98-16, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Institutions that rely on joint liability to facilitate lending to the poor have a long history and are now a common feature of many developing countries. Economists have proposed several theories of joint liability lending that stress various aspects of its informational and enforcement advantages over other forms of lending. This paper analyzes how joint-liability lending promotes screening, monitoring, state verification, and enforcement of repayment. An empirical section draws on case studies to highlight how joint liability works in practice.

Keywords: joint liability; group lending; credit cooperatives (search for similar items in EconPapers)
JEL-codes: D82 G20 N23 O12 (search for similar items in EconPapers)
Date: 1998-11
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Published in: Journal of Development Economics 60(1) 1999, 195-228

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Journal Article: The economics of lending with joint liability: theory and practice (1999) Downloads
Working Paper: The Economics of Lending with Joint Liability: Theory and Practice (1998)
Working Paper: The Economics of Lending with Joint Liability: Theory and Practice (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9816

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