Group lending or individual lending? The effectiveness of microcredit as a tool to combat poverty is much debated now that after years of rapid growth, microfinance institutions (MFIs) in various countries – including India, Bosnia and Herzegovina and Nicaragua – are struggling with client overindebtedness, repayment problems, and in some cases a political backlash against the microfinance sector as a whole. This heightened scepticism, perhaps most strongly voiced by Bateman (2010), also follows the publication of the findings of a number of randomised field experiments indicating that the impact of microcredit might be more modest than thought by its strongest advocates. These studies have tempered the expectations many had about the ability of microcredit to lift people out of poverty. (M. Bateman (2010), Why Doesnt Microfinance Work? The Destructive Rise of Local Neoliberalism, Zed Books, London/New York.) Here is a paper based on evidence from a randomised field experiment in Mongolia that argues in favour of ‘Group lending’. Interested readers may go through the paper just by clicking on the following link. d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2014303&r=dev
Posted on: Tue, 11 Mar 2014 18:55:39 +0000
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